Bankruptcy consultants have their hands full--Q&A: Bryan Gaston
Opportune's Bryan Gaston speaks with the Houston Chronicle...
The ongoing oil bust has left the energy sector deeply wounded, but business is booming for Bryan Gaston, who joined Houston-based energy consulting firm Opportune a year ago. Gaston is a managing director focused on corporate restructuring—mostly bankruptcies—in the oil and gas sector.
About 230 North American energy companies have filed for bankruptcy since the beginning of 2015, and nearly half of them are based out of Texas, according to a count by Dallas law firm Haynes & Boone.
Q: How much has your niche in the energy sector changed of late?
A: There wasn’t a lot going on for a restructuring professional here in Houston from 2005 up until about two years ago. That’s changed a lot. A lot of firms have opened offices here. There’s a lot more restructuring talent based here now than ever. It’s been a whirlwind.
Q: Is a bust ideal for you or is something in between preferred?
A: It’s fortunate for a restructuring professional when an industry downturn this significant occurs. There’s just been a lot of work. This business can be so lumpy. It’s feast or famine. You want some level of distress, but you want a mix. If you have companies in trouble, capital is still going to be part of the solution. But you don’t want it to be so easily accessible and so inexpensive that there’s really never a need to have a restructuring professional come in and really deal with fundamental problems.
Q: What kinds of problems?
A: A lot of these things just get intensified during a downturn. Sloppy maybe a loose term. Maybe a lack of discipline is a better way to put it. I think you’re able to, in good times, kind of mask that inefficiency. You can’t deal with it when you’re in a distressed situation. You have too much pressure from your lenders; they won’t advance you new money. Then you’re upside down very quickly.
Q: You handled the recent bankruptcy and total assets sale to Spain-based Tubos Reunidos. How did that process go?
A: I think the drop in their topline revenue was so fast, so steep, I think they were probably surprised by how much more aggressive the steps that I recommended they needed to take were. They felt they had done all the right things. They had people on payroll to use the equipment and fill orders if they did come in the door. But someone had got to fund that cash burn. The question is, does someone have the stomach to fund that loss? Thankfully, the lender was rational and saw that...click below for the full article.