Charlie Perer, SG Credit Partners (TMA Southern California), recently interviewed Dan Rose, Silverman Consulting (TMA Chicago/Midwest), about the state of the turnaround industry, misperceptions, market trends, insights, and challenges/opportunities in the turnaround community.
Charlie Perer: Thank you for your time, Dan. To begin, can you please talk briefly about your background?
Dan Rose: I began my career at a family office, where I primarily invested in family-run businesses. However, it was during the Great Recession that I discovered my true calling in helping distressed companies. My father, who is a CPA, left a promising corporate career to start his own business. He ran it successfully for over a decade, but like many entrepreneurs, he saw his dream unravel during the downturn and ultimately had to close the company. Watching the emotions and aftermath of that experience was one of the most challenging times of my life, and it sparked a question I still try to answer every day: how do smart, capable people lose their businesses?
That question led me into turnaround consulting, and I was fortunate to find Silverman Consulting, a firm I’ve now called home for over 16 years. What keeps me engaged in this industry is the unique mix of strategy, finance, and leadership required to guide companies through difficult times. Over the years, I’ve worked across industries from manufacturing and distribution to trucking and consumer products. Today, as a Partner at Silverman, I typically step into CRO or interim executive roles or serve as a Receiver, helping companies navigate restructuring, refinancing, or sale processes.
Perer: How would you describe the current state of the turnaround industry?
Rose: The turnaround industry is active but continues to evolve. With higher interest rates and tighter liquidity, we’re seeing more middle-market companies under stress. Banks are cautious, while private credit firms are stepping into situations banks might avoid, which changes the type of restructuring work we see. There is a noticeable disparity; smaller, undercapitalized middle-market companies are feeling the most pain, while companies with a stronger balance sheet are able to find creative financing solutions that promote economically opportunistic strategies. However, we continue to get introduced late, limiting the available options for most businesses and lenders. As an increasing number of banks are turning to the secondary market to refinance their troubled loans, an increasing number of secondary lenders are starting to turn down those loans.
Structurally, the industry looks very different from what it did ten or fifteen years ago. There are far fewer small firms with just a handful of professionals. Instead, we’re seeing more established boutiques, like Silverman, that can bring depth and resources to a situation while remaining nimble and relationship-driven. At the same time, consolidation is reshaping the landscape. Even firms with fewer than 100 professionals are now being purchased by private equity, and once that happens, the economics change. Those firms are under pressure to move upstream, toward larger engagements, to justify the rates and returns their investors require. That shift has left a meaningful gap in the true middle market, which firms like ours are well-positioned to serve.
Another trend we see is specialization. Many firms are now aligning around industry verticals, such as automotive suppliers, or focusing narrowly on areas like insolvency and liquidation. While we have industries where we excel, our philosophy is to approach each client with an open mind and no preconceived notions. In my experience, coming into a situation with a predetermined solution risks missing the nuances and sometimes the real opportunity for a more impactful resolution. By listening first and tailoring the approach, we consistently drive better outcomes for companies and their stakeholders.
Perer: How has the job changed since you first started?
Rose: When I started, restructurings tended to be more bank-driven and had a slower pace. Today, the sheer number of alternative lenders has created more complex capital structures, which means we spend more time balancing competing interests. The pace has also accelerated; what used to take months now happens in weeks. And increasingly, success comes down to managing relationships and aligning stakeholders, not just fixing numbers.
Perer: What lender behavior frustrates turnaround executives the most?
Rose: One frustration is inconsistency, but the most challenging is often the lack of alignment. You may receive a directive one day, only to be told the priority has shifted entirely the next. Another common issue is when lenders focus more on optics than substance; for example, pushing for quick actions that may look decisive but fail to set the company up for long-term success. Finally, transparency is critical. Companies and advisors can adapt to almost anything when the rules are clear, but shifting expectations without clarity creates unnecessary friction.
Perer: Have you seen decreases in opening liquidity requirements as competition among lenders heats up?
Rose: Yes, we’re seeing some easing of opening liquidity requirements, especially as private credit firms compete for deals. This creates opportunities for companies but also risk. Many deals are getting done that shouldn’t, and the lack of a true liquidity cushion makes turnaround situations more fragile and time sensitive. We are seeing a lot of new deals get booked with zero or negative availability, with structure completely thrown out the window, and very limited meaningful financial covenants.
Perer: What is driving the growth in hiring?
Rose: The growth in hiring reflects both increased demand and the need for more specialized skill sets. Firms want people who can model complex debt structures one day and walk the factory floor the next. We hire candidates with more work experience and further develop them in our approach and culture, which allows us to have better retention. This is also a hard job, where ego has no place. Managing a difficult client relationship is the number one reason we see our employees find a new career path.
We are also seeing demand from companies themselves, who are building stronger internal finance and operations teams earlier in the cycle rather than waiting for a crisis. That’s a notable shift compared to a decade ago, when many companies didn’t invest in those capabilities until they were already in distress.
We’re now seeing management teams add experienced CFOs, controllers, and operations leaders at an earlier stage, often because their lenders or private equity sponsors are pushing for it. They’re also leaning more on tools like rolling forecasts, liquidity models, and dashboard reporting to get ahead of problems.
The effect is twofold. On the one hand, it raises the bar for us as turnaround professionals, because we’re stepping into situations where the internal teams are already more sophisticated. On the other hand, it creates better collaboration, instead of spending our first month just building a cash flow model or cleaning up the books, we can start higher up the value chain and focus on strategy, negotiation, and execution. In a way, stronger in-house teams make our interventions more impactful, because the groundwork is already there
Perer: Is the turnaround industry prepared as a whole for the next downturn?
Rose: As an industry, I think we’re better prepared in some ways for the next downturn. There are more financing options available, stronger access to reliable data, and a deeper bench of specialized advisors than in past cycles. At the same time, one area that gives me pause is the relative lack of experience across many organizations, not just banks. A lot of professionals came into their roles after the last major cycle, so they haven’t yet had to navigate the complexity of a deep recession. That doesn’t mean they’re not capable — just that they haven’t been tested in that kind of environment.
If and when the next wave of restructurings hits, I think the challenge will be less about tools and resources and more about judgment and decision-making under pressure. That’s where collaboration between lenders, companies, and advisors will really matter.
Perer: How would you describe the state of special assets as a whole given many are untested?
Rose: Special assets groups are staffed leaner than in the past, and many professionals haven’t been through a full cycle. There are a few reasons for that. Coming out of the Great Recession, banks didn’t need large special assets teams for nearly a decade, so when those professionals retired or moved on, many weren’t replaced. At the same time, cost pressures inside banks have pushed headcount lower, and workout groups are no longer seen as a core focus the way they once were.
The ramification is that many of the professionals we interact with today are younger and less experienced. That doesn’t mean they aren’t talented, but without having lived through a full credit cycle, they’re often more cautious and less willing to make bold decisions. Sometimes they default to process over judgment, which can create delays. Other times, they may not be as open to the perspectives of outside advisors.
For our industry, that creates both a challenge and an opportunity. The challenge is that it can slow down the pace of a resolution or lead to missed chances to preserve value. The opportunity is that banks lean more heavily on firms like ours to provide the judgment, perspective, and decision-making experience that may not exist internally. Our role becomes not just advising the company, but also helping lenders navigate the situation with confidence.
Perer: How has the reduction of workout professionals affected turnaround executives’ business development strategies?
Rose: Given the reduction of workout professionals, we’ve had to rethink business development. In the past, the majority of our opportunities came directly from banks. Today, that’s changed; we now spend far more time educating law firms, private equity, private credit lenders, and even marketing directly to companies. It’s a longer cycle, but it broadens our reach and gives us a more diversified pipeline.
This transition really began around 2015 with the rise of secondary lenders and non-bank ABLs. Groups like Encina, now Eclipse Business Capital, along with Ares and Siena, helped kick off that trend. At first, it was a slow shift, but post-pandemic, the pace accelerated significantly as non-bank competition surged and banks retrenched.
To give you a practical example: not long ago, a traditional bank referred us into a manufacturing client that was struggling. Historically, that’s how most of our work came in. But when the bank tried to move the credit to the secondary market, three different non-bank ABLs turned it down, each with slightly different reasons. That company didn’t end up with a new bank lender at all. Instead, we got involved through a private credit group that had been evaluating the opportunity directly with the equity sponsor. Ten years ago, that referral would have only come through the bank. Today, it came through private credit, which tells you how much the ecosystem has shifted, and why our business development efforts now have to cast a much wider net.
Perer: What are the biggest misconceptions lenders have about turnaround professionals?
Rose: One misconception is that we’re simply an expensive cost center. The reality is we create value by stabilizing operations, preserving collateral, and often enhancing lender recoveries. Another misconception is that we only cut costs. In truth, strategy, growth opportunities, and management coaching are just as critical, if not more. Finally, and most importantly, we’re not adversaries; we’re there to bridge the communication and strategic gap between lenders and management.
Perer: What is the biggest opportunity for the turnaround industry?
Rose: For me, the biggest opportunity remains the middle market, where companies are under the most pressure from rising costs, tariffs, and interest rates. Many of these businesses don’t have the internal resources to navigate stress, and private credit lenders are increasingly open to creative solutions.
Perer: Do you anticipate more industry consolidation, and is there a need for it?
Rose: We’ll continue to see some consolidation, particularly among firms looking to offer a broader suite of services. Scale brings advantages, especially when competing for national clients. That said, boutique firms will always have a place as relationships, specialization, and nimbleness are advantages that big firms can’t easily replicate.
Perer: Ten years from now, will turnaround firms be back to being all independent or part of a larger diversified financial services company?
Rose: I think, much like today, we’ll see both. Some firms will align with larger financial service firms to broaden their service offerings. Others will remain independent and thrive by focusing on specialization and relationships. There’s room for both models, and clients benefit from the diversity of choice.
Perer: Lastly, tell us something you are worried about that the rest of the market has yet to figure out.
Rose: What worries me most is the overreliance on private credit, untested capital structures, and appraisals. In a prolonged downturn, I’m not sure how some of these newer lenders will react. Will they support their portfolio or exit quickly? The shortage of experienced professionals on the lender side compounds that risk. It’s a potential blind spot that could create more volatility than people expect.
Related to that is the increasing reliance on formulaic approaches to risk. Many lenders today default to models, risk formulas, or checklists to guide decisions. That can work in a benign environment, but in a true downturn, those formulas may no longer make sense. When collateral values move quickly, or when liquidity assumptions break down, it takes judgment and creativity, not just a formula, to find the right path forward. My concern is that less-experienced professionals may not know how to navigate when the numbers don’t line up neatly, which could lead to rushed exits or missed opportunities to preserve value.
Charlie Perer (TMA Southern California) is the Co-Founder and Head of Originations of SG Credit Partners, Inc.