| WILMINGTON, Del.
WILMINGTON, Del. Jan 27 Two years after
expanding its restructuring advisory practice with the
acquisition of CRG Partners, Deloitte is looking for a new
leader for the business and ideas on how to move it forward in a
In an email sent to its restructuring professionals earlier
this month, Deloitte asked for their "collective wisdom" to help
decide the future of the business of advising companies on
"The time has come to identify someone to lead the practice
for the next few years," William Snyder, the joint head of the
group said in the email that was obtained by Reuters.
Snyder said his role of integration of CRG Partners was "to
some extent" complete, while Sheila Smith, the other joint
leader, will retire in a year's time.
In his email, Snyder said candidates would be considered
from other Deloitte practice areas and external candidates would
be considered in "a very targeted manner."
Smith, in an interview with Reuters, confirmed that she must
retire in 16 months under Deloitte policy and that the firm was
looking for a new leader.
"We are out there recruiting," Smith said on Monday.
Deloitte's bet on CRG in 2012 came as a dry spell in
turnaround advisory work became a full-blown drought. Record-low
borrowing costs and an economic recovery meant fewer companies
needed to restructure.
Under the deal, Deloitte took on 18 turnaround specialists
from CRG as principals or directors and put the segment under
the co-leadership of Snyder, who had led CRG, and Smith, who had
led Deloitte's practice since 2005.
CRG specialized in ushering companies through financial
distress, working on the bankruptcies of the Texas Rangers
baseball team and Pilgrim's Pride Co. The latter was a stand-out
success that landed Snyder and CRG a $1 million bonus on top of
its $6 million fee.
Deloitte has advised the trustee overseeing the failed
broker-dealer units of Lehman Brothers and MF Global.
The Deloitte deal has allowed CRG to expand its reach
globally, and Smith said the restructuring advisory group
recently landed two engagements in South America. "That would
have been hard for the legacy CRG," she said.
She said she expects the Deloitte restructuring practice to
expand through acquisitions and internal growth. "There are
cycles. Fortuitously, we think we're well prepared for the next
Under Deloitte, CRG's partners have had to deal with
conflicts due to the larger firm's extensive roster of clients.
For example, Ted Gavin of Gavin/Solmonese in Wilmington,
Delaware, said he landed work with the unsecured creditors
committee in the Prince Sports Inc bankruptcy in part because
Deloitte was barred by a prior relationship.
Deloitte was the only Big Four accounting firm that did not
pare back its restructuring advisory businesses early last
decade in the wake of stricter regulatory oversight regarding
conflicts of interest. PwC, Ernst & Young and KPMG left the
segment, which benefited standalone consultancies such as FTI
Consulting and Mesirow Financial.
As regulations have become clearer, the Big Four accounting
firms have tried to return to the restructuring business over
the last few years. PwC, for example, brought on board industry
veteran Perry Mandarino in 2009.
But corporate bankruptcy filings are at the lowest level
since before the 2008 financial crisis and the handful of cases
provide only lightning-fast engagements managing asset sales,
industry experts say.
FTI Consulting said in its most recent quarterly results
that margins were flat and underlying revenues fell 13 percent.
It blamed the "continued underutilization in the segment's North
America bankruptcy and restructuring practices."
Restructuring advisors haven't been the only ones scratching
for work. The law firm of Weil, Gotshal & Manges, a leader in
the plum work of taking companies such as Lehman Brothers
through Chapter 11, laid off 7 percent of its associates in