By S V Venkataraman
Friday 6th October 2000
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Bruce McCallum, managing partner of McCallum Petterson and president of the New Zealand chapter of Turnaround Management Association (TMA), said while Australia included such a provision when amending its corporation law, there had been no such move here.
"We don't even have a standstill [moratorium] provision in our turnaround toolkit," he said. "Our regime could be epitomised as one comprising extensive management incompetence, credit irrationality and a legislative framework which is creditor driven and focused on liquidation of assets."
Mr McCallum was speaking during the TMA's inaugural conference, in Auckland this week, which featured a number of international speakers.
"Our banking environment is rightly focused on debt recovery rather than business resuscitation. But there is growing awareness of turnaround management as an effective solution to salvage businesses."
One of the obstacles was the inefficient venture capital market and the absence of a secondary market for commercial debt. This meant companies requiring an injection of capital during restructuring found it difficult to locate suitable investors.
"TMA New Zealand is committed to actively promoting the establishment of a more efficient capital market. This could include an electronic venture capital market which is currency being investigated based on the successful Swedish model," he said.
Melanie Cohen, a partner at Chicago-based Altheimer & Gray, said recovery had become a well accepted concept in US and the TMA was recognised as an important platform to bring together professionals in the process.
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