Jonathan Krieger, CPA, CA, CIRP, LIT
Senior Vice President and National Practice Leader
Grant Thornton Limited
Not too many practitioners can say they uncovered a fraud on their first ever file. Jonathan had an exciting start to his restructuring career and has covered a lot of ground since then. He now heads up Grant Thornton’s restructuring practice in Canada, in addition to being the Advisory Services Leader for Southern Ontario. Jonathan sits down with us to discuss, among other things, the challenges and opportunities facing the profession.
I began my career with the firm in 1994, so I am a 23 year veteran of Grant Thornton. As with many of my colleagues, I started as an associate in our audit team, and I became involved in a few restructuring assignments by happenstance. While in audit, the restructuring team was in need of an associate to assist with financial reviews of two manufacturing companies and I thought it would be an interesting experience during a slow summer in audit. I still remember walking into a warehouse on my first engagement, and there were only empty boxes on the racks notwithstanding that the company was representing significant inventory to their bank as part of their margining. I had witnessed a misrepresentation on my first day of the job which was both exciting and nerve racking. After spending another year in audit, I joined the restructuring group on a permanent basis in the summer of 1997, was admitted to partnership in 2004, and became the practice leader in 2011.
2) What are some of the restructurings you are most proud of and why?
During the automotive downturn which started in 2007, there were a significant number of insolvencies in the automotive parts industry. We were appointed as financial advisor to a bank to report and make recommendations in respect of a troubled loan. We spent considerable time getting to understand the business, their order book, their competitive advantages in the industry, and the strength of their supplier and customer relationships. Contrary to the expectations of the bank, we recommended a strategy to continue supporting the borrower, where the lender and our team would continue to assist and work with the company. Our view was that the business had the possibility of being a gem in an otherwise challenged industry. 10 years later, the company has emerged as a prominent, respected and highly successful automotive parts player. I am particularly proud of the end result, as we didn’t take the easy road and truly added value with our expertise and knowledge. Also, we were able to facilitate a restructuring without the stigma of a formal insolvency filing which is hard to come by. [I also love cars so this was an even more exciting project]
3) You have been the leader of GT’s restructuring group since 2011. What is the hardest part about leading a group with offices across the country?
My colleagues are outstanding, from my partners to our hard working people in all our major centres, so I wouldn’t characterize the job as hard. Working with high performing people is critical, as this allows me to focus to a large extent on my client practice without getting bogged down in administration. However, one challenge is that Canada spans four time zones, so on any given day, action happens from early morning to late at night. A second challenge is that outside of our National meetings and calls, I often only get called when there are problems or very challenging issues so I don’t necessarily get a chance to celebrate in all of our successes.
4) What do you see as the biggest challenges facing the profession at the moment?
The statistics over the past ten years have generally shown that there is a decline in the number of corporate insolvency filings. This has created significant competition amongst practitioners, who are all keen to pursue the same limited work in the industry. This may act as a deterrent to young people considering getting into the profession, who are concerned about the ability to grow a practice and succeed as a long term career.
In parallel with this, other organizations have also recognized that those with a restructuring mindset have very valuable tools to help their business grow and succeed, and our best people are always in demand outside of public practice. Just look at the careers section of Insolvency Insider – not only firms but also industry players are looking to add talent. It is interesting that the industry is relatively slow, yet there is still strong demand for good people.
5) On the flip side, what do you see as the biggest opportunities? Do you see the nature of engagements / roles changing?
When I joined the team in 1997, the majority of our mandates were private receiverships or bankruptcies, largely because we were engaged on mandates very late in the process, at a point where there were no alternatives available other than liquidation. In the past 10 years, there has been a meaningful shift in the industry towards rehabilitation rather than wind down, which has been very rewarding.
Engagements have also become more complex and require stronger business acumen. A practitioner has to approach a mandate with a multi-disciplinary mindset, including in some cases forensic skills and a corporate finance bent. If the end game is rehabilitation, it takes a lot more than an understanding of the Bankruptcy and Insolvency Act. This can create significant opportunities for those that are willing to think outside the box.
Another opportunity is industry specialization. Most practitioners are generalists, but I believe that those who gain exceptional knowledge and experience in certain sectors will reap rewards. Whether your specialty is energy, real estate, automotive, etc. you will earn dividends if you can walk the talk.
6) What are the keys to succeeding in this line of work, in your opinion?
Continuous learning and practical thinking are critical to a successful and long career. Also, outstanding work product is the table stakes for being a leading practitioner. The saying that you are only as good as your last file, is true.
7) What is something that most people you work with would not know about you?
After working closely with a team for over 20 years, there aren’t too many secrets here. Outside of the firm, my colleagues may not know me as well beyond my work persona. While I love my profession, my real excitement comes from my family. I am very active in supporting and encouraging my kids in their sports, whether it’s baseball, dancing, basketball, or soccer, which usually fill our weekends.
As for something most people wouldn’t know, I was one of the least fit kids growing up, yet I am now very much into running, cycling and fitness. I am at a point where I am comfortable challenging any of my colleagues (including those 20 years younger) to a 100 meter dash…