As we approach the end of 2020 with significant parts of most of the world’s major economies still in a state of induced coma, most of north western Europe is having to face up to the prospect of a long bleak winter. I suspect there will be many of us who will be glad to see the end of 2020 and a return to some form of normality, however slight, in 2021, whatever ‘new normal’ means. Our thoughts go out to all those who have lost family and friends because of the pandemic, and to those who have been adversely affected both financially and emotionally.

We have seen unprecedented measures being taken by governments to save lives, businesses, jobs and their economies. The level of government support hitherto has been eye watering, and it continues to be, as many governments strive to buy time and build a bridge to a reliable and safe vaccine. At the time of writing there is a glimmer of hope in a couple of vaccine trials showing amazing results, which may be capable of being released to the vulnerable sections of our societies this side of Christmas. Let’s hope so.

For me, my personal experience over the past 7-8 months has largely been a good one. My close family and I have remained well, healthy and mostly sane throughout, despite us seeing more of each over the last few months than would ever have imagined possible 12 months ago! Enforced home working has generally been a good thing. Those times have been very special, despite our inability, to socialise with friends, work colleagues and to travel. We have a much closer connection to our locality and the providers on our doorstep. We consider ourselves very fortunate.

Professionally, my UK work experience this year is best described as a ‘phoney war’ for the most part. Those outside of the Restructuring business expect us to be inundated with opportunities. The reality has been somewhat different. Apart from an uptick in advisory opportunities at the start of the pandemic, those businesses in the frontline, retail, hospitality, travel and leisure, formal insolvencies have remained subdued. In fact, the statistics in the UK show that formal corporate insolvencies are down by as much as 40% compared to the same period a year ago. But then it’s no wonder, given the UK governments intervention by way of tax deferrals, state backed loans and employee furlough/job retention schemes, not failing to mention the prohibition on landlords ability to force recovery of unpaid rents and forfeiture of leases, and an effective ban on the issue of statutory demands and winding up petitions. The pinch points which ultimately force many businesses to reluctantly engage with Restructuring professionals have largely been abated. The economy and the businesses within it have in effect been given a large dose of financial vaccine.

I do however fear for many businesses when the uptick eventually comes. They will have to grapple with what ‘new normal’ really means for them, add up their losses and the debt incurred during the pandemic, and endeavour to wean themselves off the government’s financial vaccine. Many will be tempted to pursue aggressive growth plans to restore their financial wellbeing, and sadly some will get it wrong. Even more so for those with substantially weakened financial positions (if they were ever that strong pre the pandemic!). It will come as no surprise if these businesses owner/mangers begin to question the merits of their efforts to pay down those positions over the coming years, or do they look for other routes which provide them with a fresh start and a clean slate? 

One thing is certain, if coming out of this pandemic induced recession is like any others – more businesses will go bust as we come out of the recession that at any time either during it or entering it! And therein lies our opportunity as Restructuring and Turnaround professionals. If they are to avoid the many potential pitfalls, the businesses and their stakeholders will need our unique skills and expertise to ensure enterprise values are maintained and enhanced. Uncertainty in crisis and business transformation is our currency and our opportunity!

In this issue we will hear from the EACTP President, Alan Tilley, who will provide us with an update on the progress of our Education and Certification programme and on our plans for member events in 2021. There’s really some momentum beginning to build here.

We’ll also look across Europe at how different countries are implementing reforms to respond to the COVID-19 challenges, Germany’s new restructuring law and how Italy is responding to the second wave and the additional support measures put in place. 

In the UK, I will look to assess the impact on the financing of small-medium sized enterprises of the UK government’s insistence on restoring ‘Crown Preference’. I happen to think a rethink is required, but it appears our concerns have not been heard.

David Bryan will look at the likely impact of COVID-19 on small to medium sized enterprises across Europe and reflect on a survey published by Wiserfunding on SME company survival prospects in 2021 in the UK, France, Germany, Italy and Spain. 

And I’ll wrap up with a thought leadership piece on WHY some individuals and businesses are more successful than others.

Finally, all that remains now is for me to wish you and your families the very best of wishes across the festive season and into the New Year. Keep well, happy and safe! I very much look forward to hearing from you and to catching up with you, physically I hope, in 2021!  

Thank you
Tyrone Courtman
TMA Europe Board member, TMA Global Trustee
Former Founding EACTP President
Partner, RSM Restructuring Advisory LLP
December 2020

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