Tuesday, November 25, 2008

Good News for Restructuring Specialists

As the economy drags more firms under, mid-size accounting firms may see a boost in their restructuring business, points out a feature in London’s Financial Times. Will the story be the same here in the United States? Jennifer Hughes writes:

The dominance of the Big Four in traditional accounting work is set to boost mid-tier rival BDO Stoy Hayward as it scoops uprestructuring work they are unable to take on, according to its head.

Simon Michaels, managing partner, said it was more likely that the Big Four firms, comprising PwC, KPMG, Ernst & Young and Deloitte, would find conflicts with their regular work, such as audit or advisory, for struggling companies, meaning his group could pick up the pieces.

BDO is working on the administration of Dawnay Day, the property and financial services group, and has taken on the independent valuation of Northern Rock, the nationalised bank. Both are among the biggest projects it has taken on and Mr. Michaels said it had the capacity for more.

"We find ourselves less conflicted than the Big Four so I can only see it going one way with us getting more of the work," he said.

The Big Four audit nearly all FTSE 250 members plus a significant proportion of smaller companies. Many groups will already have a relationship with two or more companies of the four, meaning theycould be ruled out of restructuring work for their clients.

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