Professionals Who Helped Save Companies and Jobs  
Honored with TMA Turnaround of the Year Awards  

CHICAGO, Ill. -- October 2005-- When a business is in crisis and jobs are at stake, the professionals in the Turnaround Management Association (TMA) are often the ones who step in to help a struggling company recover. This year's Turnaround of the Year award winners are outstanding examples of how using a unique set of skills in operations, management, and finance can turn around a company once thought to be unsalvageable.   Six individuals, along with a team of corporate renewal professionals, were selected in five categories and honored at the Annual Convention, October 18-21, at the Chicago Hilton & Towers in Chicago.  

They included:

Mid-size Company Turnaround (Revenue between $50 million and $300 million USD ): James J. Loughlin Jr., CTP, of Loughlin Meghji + Company , New York, for IWO Holdings, Inc., Albany, N.Y.

Independent Wireless One (IWO) owns and is responsible for building, operating and managing a portion of the Sprint PCS nationwide wireless network.   It was acquired by another Sprint Affiliate, US Unwired (USU) in April 2002.   In December 2003, IWO was the sixth largest Sprint PCS affiliate with 215,000 subscribers, revenues of $170 million, 660 cell sites and 16 retail stores in the northeastern United States. IWO paid a percentage of revenues and   management fees to Sprint in exchange for support services. IWO had incurred $400 million of debt to finance the construction of its local networks and fund the significant shortfall in its operational cash flow.

Verizon Wireless dominated IWO's market and impacted its ability to grow the subscriber base. As revenue forecasts failed to materialize, profitability and operational cash flow suffered and, as a result, IWO began to experience severe liquidity problems.   IWO was able to make it through 2003 by not making interest payments on its bank debt and drastically reducing capital expenditures. The company was generating only slightly positive EBITDA despite integrating the IWO operating platform into USU's.

The company's lenders and bondholders were increasingly concerned.     By early 2004, IWO's debt was trading at a steep discount and the business had an implied valuation of less than $150 million. There were also serious business disputes between IWO and Sprint. IWO withheld payments from Sprint and faced potential defaults under its affiliate and credit agreements.

The mounting issues created the need for a crisis manager to lead the restructuring process. In early 2004, James J. Loughlin Jr., CTP, founding partner of Loughlin Meghji + Company, came in as the chief restructuring officer, supported by John Fleming from LM+Co.   A team of management and legal and financial advisors quickly created an action plan of cash management and rationalization, controlled growth within financial constraints and financial reorganization.  

To implement the plan, the team negotiated a consensual pre-packaged Chapter 11 with all the creditors and USU. Not only did the transaction involve complex negotiations between multiple parties, it also involved transitioning the operations to an entirely new management team while the company was raising $232 million from a creative and unique capital markets transaction to take advantage of very strong conditions in the high yield debt marketplace. The financing was closed into an escrow account only two weeks before the Chapter 11 filing.

The entire Chapter 11 process was completed in 40 days, saving the company significant expense and minimizing the impact of bankruptcy on the business.

This turnaround used the skill sets of the team - operations, finance and restructuring - to create a successful outcome for all the stakeholders. Nearly 190 jobs were preserved, with at least 40 more to be created in the new stand-alone IWO.

Enterprise value improved by approximately $250 million or 165 percent and the bank lenders received 100 percent recovery in cash, while the bondholders received 100 percent of the equity in the reorganized IWO.

In a recent development, on August 29, 2005, Sprint announced its intention to buy IWO for $400 million.

Mega Company Turnaround ($1 billion USD or greater in revenue at the onset of the turnaround):   Dennis M. Ladd, CTP , of Glass & Associates, Inc ., Dallas, for Southern States Cooperative, Inc., Richmond, Va.   International Company Turnaround (Company with significant cross-border operations): Pat Marso of Mentor Partners, LLC , Minneapolis, for Jean Charles Mexicali S.A. De C.V., Ejido Nuevo Leon, Mexico.

Large Company Turnaround ($300 million USD or greater in revenue): William C. Kosturos, CTP, of Alvarez & Marsal, San Francisco, for Spiegel, Inc., Redmond, Va.

Small Company Turnaround (Revenue of $50 million USD ): Ronald S. Castor of JC Jones & Associates, LLC , Pittsford, NY, for Knowlton Specialty Papers, Inc., Watertown, N.Y.

Small Company Turnaround -- Honorable Mention : David M. Baker of Aurora Management Partners, Inc., Hickory, NC, for Summitville Tiles, Inc., Summitville, Ohio

With international headquarters in Chicago, TMA's 7,000 members in 34 regional chapters comprise a professional community of turnaround practitioners, attorneys, investors, lenders, venture capitalists, accountants, appraisers, liquidators, executive recruiters and consultants. Members adhere to a Code of Ethics specifying high standards of professionalism, integrity and competence. Its Certified Turnaround Professional (CTP) program recognizes professional excellence and provides an objective measure of expertise related to workouts, restructurings and corporate renewal.