1. Mitigating risk is an organizational imperative today. A global survey of 50-plus banks
conducted by McKinsey & Company and the Risk Management Association found financial insti-
tutions are shifting their risk strategies from a focus on measurement and compliance to horizon-
facing initiatives in the boardroom and across divisions. This fall, Bloomberg published an article
stating the Financial Stability Board would require the world’s largest banks to bolster liability
buffers to steer them through crises. And in December, Reuters reported Basel regulators were
spotlighting inconsistencies in how big banks calculate capital buffers that undermined investor
confidence in capital ratios — a measure of lenders’ health.
Our risk management issue focuses on this mission-critical component of any lending institution.
At the heart of a sound defensive strategy is the field exam. Joseph Iannuccilli, founder/CEO of
Sound Shore Financial, recounts a memorable fraud uncovered by his firm, and underscores why
the field exam is central to avoiding/minimizing lender losses.
Hilco Global — keenly aware of the importance of managing risk — launched Hilco Diligence
Services as a complement to its valuation offerings. Hilco Global Managing Director Doug Jung
tells us company leaders saw a marketplace need for a diligence group grounded in asset-based
field exams. Kenneth S. Frieze, new CEO at Gordon Brothers Group, examines risk factors of
energy, retail, real estate and brand assets. And Rob Lee, SVP at AxiomSL, gives a primer on recent
CCAR federal requirements — meant to ensure capital adequacy and solvency under adverse
conditions.
I enjoyed talking to MB Business Capital President Michael Sharkey, ABL guru and industry
luminary, about his plans for the newly rebranded commercial bank following MB Financial’s
acquisition of Taylor Capital Group. Sharkey isn’t shy about his intention of becoming a leader in
the ABL space.
A timely component to our lineup, Nutter McClennen & Fish attorneys Philip R. Rosenblatt
and John G. Loughnane warn lenders about pitfalls when structuring the increasingly popular
unitranche transaction. A lack of court testing of the unitranche structure has left many ques-
tions unanswered. As such, the authors recommend looking to the American Roads decision as a
model. With some bright news for the economy James Marple, TD Bank Group senior economist,
forecasts 2.9% growth in 2015.
Our departments are ever-instructive. In Turnaround Corner, Ravinia Capital Founder Tom
Goldblatt shows how to turn a significant loss into a “best possible” outcome for stakeholders
when selling troubled companies. Specialty Lending’s Claudia Gourdon, Healthcare Finance
Group CMO, demystifies the federal DSRIP program for lenders in a shifting healthcare market-
place. And Richard A. Robinson, partner at Reed Smith, reveals in Legal Lines, why secured
creditor actions taken early in a contested Chapter 11 case have later implications.
I’d love to hear what measures you’ve implemented to minimize risk at your organization. Email
me at jhoffman@abfjournal.com. As always, stay in touch!
JILL HOFFMAN, EDITOR
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4 • abfJournal • JAN/FEB 2015