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Turnaround champs. From left: David Bochenek, Jason Manel, Karn Chopra and Rob Damstra and (all '07)

Fiscal fight

Turnaround is fair play for Kellogg School team taking top prize in annual ABI restructuring competition

By Matt Golosinski

1/22/2007 - Eleven leading business schools competed for honors in the 3rd Annual ABI Corporate Restructuring Competition, held Jan. 19-21 at Wieboldt Hall on the Kellogg School's Chicago campus.

Taking home the first-place trophy and a $5,000 prize was the Kellogg School team, composed of David Bochenek, Karn Chopra, Rob Damstra and Jason Manel. The students, all Class of 2007, put their finance and management knowledge to work over an intense weekend to solve a thorny challenge posed by Millstone Automotive Holdings Inc., a fictional distressed automotive supplier.

The complex 25-page case forced students to identify operational initiatives and strategic alternatives and recommendations for Millstone, compelled by circumstances to operate in a liquidity crisis. The teams had one week prior to the event to analyze the case, including 17 technical questions, and were required to prepare a written presentation for the judges — all experts in the turnaround and restructuring space — in addition to presenting their findings in person to three panels of judges. The competitors considered a number of key areas, including liquidity analysis, capital structure analysis, debt capacity and valuation.

Among those competing in the contest, co-sponsored by the American Bankruptcy Institute and Houlihan Lokey Investment Banking Services, was the Wharton School of Business at the University of Pennsylvania, the Stern School of Business at New York University, the Ross School of Business at the University of Michigan, the Darden School of Business at the University of Virginia, the Graduate School of Business at the University of Chicago, the Tuck School of Business at Dartmouth College, the Mendoza College of Business at Notre Dame, the Fuqua School of Business at Duke University, the Haas School of Business at the University of California-Berkeley, and the Stanford Graduate School of Business.

The Kellogg team, however, proved victorious, despite the rigorous test.

“Having been involved in many case competitions, I can say that the Corporate Restructuring Case Competition is one of the most realistic I have seen,” said Tim Thompson, Kellogg senior lecturer in finance. “The judges pull no punches. Our team did extremely well in their presentations and were very good at answering questions from the judges who were relentlessly demanding.”

The competition has been held at Kellogg School of Management for the past three years. Its primary purpose is to provide students with the opportunity to solve a realistic business case of a hypothetical distressed company while undergoing intensive scrutiny. The competition also serves as a networking opportunity for students interested in corporate restructuring and turnaround to meet industry practitioners, including consultants, investors in distressed securities and corporate executives with experience in turning around distressed companies.

Thompson noted that the competition requires participants not only to possess good business judgment and good strategic, operational and financial tools, but also to demonstrate familiarity with distressed companies and issues that arise in bankruptcy situations.

In addition to the cash prize, the Kellogg team earned the right to have the school’s name engraved on the Bettina M. Whyte trophy, a special honor since Whyte, in addition to serving as a past president for the ABI and being instrumental in initiating the case competition, is also a Kellogg School graduate of the Class of 1975.

Said Karn Chopra, a member of the winning Kellogg team: "Seven Kellogg students are working with the Levy Institute for Entrepreneurial Practice to plan the inaugural Kellogg Turnaround Management Conference on April 25. We are hopeful that the Kellogg performance in the ABI Case Competition creates positive publicity for the upcoming conference."

Chopra also stated his desire that these events would encourage more restructuring advisers to recruit at the Kellogg School as a result of the increasingly strong student performances in the finance area.

Commenting on his team's victory, Jason Manel said that he and his peers leveraged their collective talents to bring home the top prize. "Much of our success was attributable to capitalizing on the similarity and the diversity of our experiences in a highly synergistic way."

The team's strategy? A careful balance of financial analysis, group discussion and YouTube videos, said Manel.