Corporate restructuring in Europe is set to increase over the nest few years as companies find little respite in unforgiving markets, according to two corporate restructuring heads.
Allen Tilley, the managing director of Glass Europe - the management turnaround advisor - has warned that corporate distress in Europe will increase. "Any fool can lend money", comments Tilley, "and it may be a cynical remark, but greed often triumphs over common sense."
And treasury, warns Tilley, is always the first place to look when a company is ailing: "The issue of receivables in Europe is important. Telling signs of poorly run companies are to be found in receivables - it's a real insight in to the company."
Antonio Alvarez III, the managing director of Alvarez & Marsal - the corporate restructuring specialist that focuses on restructuring in European corporates - echoes this view. "European companies tend to have complex treasury structures and are not as streamlined as in the US."
Despite difficult market conditions, both speakers highlighted the key driver behind corporate failure: poor management - 84% of the cases of corporate failure, according to research by the London Business School, are characterized by poor management.