Most (66 percent) of the 35 Opinion Leaders in the Turnaround Management Association answering a "Flash Watch" one-question poll last week believe that the U.S. government rescue of the financial system will eventually free up credit for distressed businesses.

However, respondents, who are turnaround and restructuring experts, are divided on when that critical capital will be available:

- 29% - by the 1st half of 2009
- 23% - by the 2nd half of 2009
- 14% - by the 1st half of 2010

The remaining one-third (34 percent) are more pessimistic, believing that the rescue plan as currently outlined will not be effective in providing credit for troubled companies.

"The restructuring industry is going to need to be very creative in the next 12 to 24 months or even longer," said Mark Indelicato, TMA vice president of chapter relations and bankruptcy attorney with Hahn & Hessen LLP in New York City. "We have gone from a period of unprecedented liquidity to no liquidity at all. The restructuring professional is not only going to have to solve the operational issues, but also maximize cash flow to provide the distressed company with the ability to compete in this credit market. These companies are facing severe economic conditions that will make it extremely difficult, if not impossible to reorganize."

Many of the respondents commented that they expect to see more out-of-court liquidations than restructurings in this new economic environment. Others predicted that equity funds will begin to take on the role of the lender to fill the void left behind by banks leaving the asset-based lending (ABL) market. Another observed that "the compression of the timeline from initial default to liquidation will likely be measured in months. Only businesses that seek competent professional help before a crisis will survive."

"The reality is that banks have a number of attractive sources to increase yields," said Anu Singh, a Certified Turnaround Professional (CTP) from the Chicago/Midwest TMA Chapter and vice president at Kaufman Hall. "Turnaround lending is likely to be too far out of line with most banks' risk/return matrix."

Noting the global effect of the U.S. financial crisis, David Hole, a director on the board of the TMA United Kingdom Chapter and the CEO of Alexander Business Consulting in Manchester, England, said, "Our specialized [turnaround] industry will come into the public arena as businesses learn of the benefits of using our skills."