Bailing Out Distressed Business

Bailing Out Distressed Business Sunny Gault: Hi, welcome to Dog and Pony, I'm Sunny Gault. He turns dead- end business situations into projects with positive results. Needless to say, Jamie Katz, CEO of J. Edward Company is a good guy to have around when the going gets tough. Jamie, you formed that company that exists to help other companies that are in tough business situations, and you obviously saw a need for that. Tell me about that need. Jamie Katz: Business is tough, and there are a lot of problems and people going to a business thinking that they are going to be able to start it and complete it successfully and that is not always the case. They don't have either the expertise or the money or the knowledge in which to complete the project. So, they get stuck. Sunny Gault: What formula do you go through to get these businesses back on track? Jamie Katz: All I want to know is their objective and the problem, so far. What problems have they come up against? And then we look at and say, how would I run this business, how would I restructure, what would I do with this building? How will I reinvent it, how would I restructure it, what are the assets, what are the problems, what are the detriments. Should this be scrapped, is this something to be saved, should we bring in a partner, an investor. Should we try to raise capital, should we sell off certain things? Should we make the project smaller, should we make the project bigger, you know. What do we need to do to make this a viable project because that's the bottom line. A gentleman called me up, he wanted to build 300 homes for a particular government, and he wants to borrow all the money at once and nobody will lend him the money. And nobody told him that he didn't need to borrow all the money because he couldn't build all the houses at one time. He could only build 10 houses a month. And the government is going to buy the house when they are complete, so he really needs a line of credit from the suppliers. He didn't even need a loan. So his problem was that he didn't know what his problem was. And then when he found out what his problem was, he still didn't have a solution. They don't know who to trust, they don't get the right advice, they don't believe in paying for the right advice and they end up finding out that they're way over their head. Sunny Gault: And then they call you. Jamie Katz: Hopefully. Sunny Gault: How do they usually find you? How do you get your clients? Jamie Katz: Mostly, referral. We grew over the years. I didn't start it out doing these 25 years ago. Some of my clients may be non-profits. Sometimes, it's just the city government that has a property they own, and they can't do internal funding or they can't raise the money any other way and they don't utilize their property to raise money especially in foreign countries. Sometimes its corporations, sometimes its hospitals, it's just nursing homes, developers. And also, the other side is the investor and that's the ones to participate in some of these projects. Sunny Gault: Solving these problems you call it a gift. Tell me about that. Jamie Katz: Everybody is good at something and what I like to think is that I'm good at being able to get to the bottom line quickly. My entire intention and I think intention is a big part of what we do, was to see if I could help people who couldn't help themselves get the financing of the business off the ground. That was my main motivation because I like helping people. If I could swim like Michael Phelps, I would, but I can't. The gift part is that it isn't something that you can be trained for. It's almost an innate sense of combining experience and education and instinct. A long time ago I assume that people relied more on their instincts, they're entrepreneurs. They rely more on their gut, their feelings, how to do things, they look at a property and they say this is the one that's worth. Nowadays, everything is so computerized and PowerPoint and presentations, and everybody come to the table with a very limited perspective. Sunny Gault: How does your company make money? Jamie Katz: We do charge fees for performance-based, you know when we arrange the financing or participate in the turn-around. We do not charge upfront fees. And if we do consulting then we do charge on a daily basis for consulting and that depends on whether if there's going to be financing later on or participations, so it's all negotiable. But we don't charge anybody if we don't do anything for them. Sunny Gault: There's a big problem in the U.S. now, the housing crisis that we're facing. I know you have a book that's coming out that addresses this a little bit and I know we can't dive into too much information. But essentially, you feel like you have a solution to the housing crisis. Jamie Katz: I think I do. I think that it will be a win-win for everybody involved. The banks, the government, the consumer, international, national, everybody will benefit from it and I don't see that there's any one group that would have a problem with it. I hope to be able to release it very soon. Sunny Gault: Are you happy where your business is right now with the direction of your company and where it's going? Jamie Katz: Well, business is a lifestyle for me. I designed the business around my lifestyle, rather than my lifestyle around my business. Sunny Gault: And what is your lifestyle? Jamie Katz: I enjoy traveling and I'm not a workaholic. And I like helping and I like problem solving. It's what I'm meant to do. Sunny Gault: Well, Jamie, it was a pleasure meeting you today. Jamie Katz: Thank you. Sunny Gault: Thank you so much for being on our show. Jamie Katz: Thank you very much. Sunny Gault: And as always, if you have questions, comments or ideas for guests, please e-mail info@dogandpony.com. I'm Sunny Gault. Thanks for watching.