I trust I have gotten your attention now.  If you can suspend your disbelief momentarily, I promise this will be worthwhile to you – maybe even as soon as tomorrow.

The secret of Nigerian e-mail scams is far from obvious but it is astoundingly simple.  Recently an article in Computer World explained why such schemes are more successful than ever. - despite the fact that virtually every man, woman and child on the planet has heard of  ”Nigerian e-mail scams.” Continue reading

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As time goes on, the nature of bankruptcy news becomes more and more unusual. Dominating the bankruptcy news cycle lately has been the meltdown of the uber-law firm, Dewey LeBoeuf.  Over the past twenty four hours, it’s been reported that a liquidating chapter 11 is imminent, triggered by bondholders.

Bondholders?

To most restructuring types, the most interesting aspect of this story is the fact the law firm obtained bond financing. According to public sources, Dewey issued $125 million in bonds in 2010 in a private placement. According to reports, the bonds were purchased primarily by insurance companies. Continue reading

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The Great Debate was a famous debate in 1920 between two astronomers over whether the Milky Way is the only galaxy.

At last weekend’s American Bankruptcy Institute Annual Meeting, in accordance with established tradition, the kick-off session was the “Great Debate.”  This year, the Great Debate took on the most timely, popular and pervasive of controversial subjects: whether parties trading on non public information in a bankruptcy case should be subject to mandatory trading restrictions.  Two prominent lawyers, both past ABI presidents, debated the topic, each taking the opposite side.

The first speaker argued in favor of such restrictions. Interestingly, he presented no concrete argument other than bankruptcy policy. His opponent, however, advanced much more concrete arguments against the institution of such restrictions. He made the rational and persuasive argument that none of the parties in a chapter 11 case are directly injured by claims trading – only the other party to the trade. Thus, there is no justification for creating causes of action based on conduct that bears no causal relationship to the other creditors’ losses. Continue reading

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Distressed companies often receive seemingly conflicting advice from restructuring professionals. They are told: “stick to your knitting” and “stay inside your wheelhouse” and “hit your sweet spot.”

They are also told to “think outside the box” and “color outside the lines” and “reconfigure”  - or else face zombification. Continue reading

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The women in New York amaze me. Every day on the subway, I observe women of all income levels, ages, and walks of life. They all have one thing in common: they are remarkably well put together.

For years I have analyzed this question: how do New York women present themselves to the world so effectively?  What exactly do they do to develop this “core competency”? Continue reading

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In the beginning of January 2012, Fuller Brush Company announced that “this was a landmark year … we have devoted a significant amount of time and effort toward creating new strategies to better serve our customers” and “refreshed our branding to meet the needs of today’s consumers.”  Last week, after declaring only last month that it had “rebooted,” Fuller filed chapter 11.

Fuller’s use of the word “reboot” – meaning the restarting of an electronic device – for a company that sells manual brushes which have been replaced largely by newer (and often electronic) technology – was ironic, and as it turns out, unfortunate. Continue reading

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First of all, let me say that I am not a Luddite. I am about as far from a Luddite as I could be. But there comes a point where, in my role of the blogger-in-chief for the collective unconscious of the restructuring world, I have to throw sabots in the looms. (Or, in this case, throw Louboutins at the iPads).

The word "sabotage" came from the word "sabot" - the clogs that Luddites threw at looms in protest of industrialization.

If the thought of someone hitting your iPad with a high heeled shoe makes you cringe, then you need to read this.

In a recent article,  Dave Paul Strohecher commented on Nick Pearce’s examination on his blog of the zombification of higher education. Pearce observed that the use of VLE’s (virtual learning environments) was replacing “face to face human learning” with “undead digital teaching”:

http://digitalscholar.wordpress.com/2011/02/28/zombies-technology-capitalism/#comment-106

In the teaching model, VLE’s provide control and consistency in a way not possible with traditional methods. VLE’s do this by limiting personal interaction.  Strohecher suggests that teachers are driven to the use of VLE’s by student apathy. Continue reading

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Lululemon Athletica, a Canadian athletic apparel company, has a slogan on its shopping bags: “The world is changing at such a rapid rate that waiting to implement changes will leave you 2 steps behind. DO IT NOW, DO IT NOW, DO IT NOW.”

Before we talk about the slogan, a word about the shopping bags: they are light, durable, recyclable.  In Manhattan, everywhere you turn, a woman is carrying one.  Lulu has managed to turn the fashion capital’s female population into walking sandwich boards. How did Lulu do this? By rejecting the traditional wisdom that (1) conventional advertising is essential, and (2) shopping bags are thrown away and thus need to be as cheap as possible. Continue reading

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zom·bie /ˈzämbē (noun): the body of a dead person given the semblance of life, but mute and will-less, by a supernatural force; a corpse brought back to life unnaturally by witchcraft or voodoo

Zombies are very popular lately. There are zombie properties, zombie brands, zombie industries, and even zombie leggings.

“Zombification” is a variant of the word zombie, used in the restructuring world to mean headed toward death – as in the case of an industry or a brand.

Zombification can describe an asset with the potential for rebirth – as in the case of properties, as the Wall Street Journal recently reported (“Zombie Properties Come Back to Life”  by Eliot Brown, November 2, 2011):

http://online.wsj.com/article

Restructuring professionals are dealing with all manner of zombies. Each one became a zombie in a different way, and we have different approaches to each one of them.

In the case of zombie properties, the causes are so “macro” they are beyond our comprehension.  But zombie properties, like Kenny in SouthPark, come back to life.  Once a property is in the hands of a new owner, free and clear of old encumbrances, it loses it zombie characteristics, and snaps back to life. Continue reading

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Heard on the street: If failure is the mother of success, then who is the father? Or does success, like Heather, have two mommies?”

CNN recently ran a series on creativity.  One of the articles was “The Success of Failure.”

http://www.cnn.com/2012/01/20/living/jennifer-egan-creativity-failure/index.html

While this particular piece was not directed specifically at business failures, the timing was striking.  Its been over three years since one of the worst financial meltdowns in history. We are still digging ourselves out.  Are we still in “failure” mode?

Nowhere is failure more apparent than in the restructuring area.  Every case stems from a failure of one kind or another.  Our job is to make a success of it, or at least try to salvage what we can.  This is ever more challenging now, given that the economy is still operating like the Spaceship Mir. Continue reading

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