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April, 2011 Contents
SC&H Transition Advisors Leaders 
Joe Foss, Joe Foss oversees SC&H Transition Advisors, a team within SC&H Group focused on assisting companies in the midst of change. With more than 35 years of experience in a variety of industries, including banking, professional sports, and elder care — Joe has significant experience steering organizations through major challenges, transitions, and corporate turnarounds. Joe is the former Chief Administrative Officer for Erickson Retirement Communities and Chief Operating Officer for the Baltimore Orioles. He has held various leadership positions within banks, including serving as Chairman/Chief Executive Officer of First American Bank in Washington, DC. 
Mark H. Moderacki, CPA, Mark Moderacki brings a wealth of knowledge to the SC&H Transition Advisors team, with more than 30 years of experience in executive management and public accounting. As a former "Big Four" CPA, Mark possesses a unique combination of operational and financial skill sets resulting from holding President, COO, and CFO positions.
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Welcome to our inaugural newsletter. We are hopeful that you find the content to be interesting and pertinent to your current business experiences. Please look for this to arrive around the beginning of each quarter. Thank you for keeping us in your thoughts. Leading indicators portend an improving economy; however, our interpretation of the activities in marketplace lead us to a very different outlook. Continued uncertainty surrounds the fiscal health of the various government entities and the resultant indeterminate actions to be taken by Washington and state and local governments, combined with continuing uncertainty in the private sector is keeping a damper on both investing and hiring activities. In this light, U.S. Federal debt ended 2010 at a level equaling 93.25% of GDP. This stands in stark contrast to a comparable time in our history, the Great Depression, when between 1929 and 1934 GDP was never higher than 41% and averaged 28.4% during these six years. There has been only one period in our Country's history since 1792 that that this ratio has exceeded the current level – in the three post World War II years of 1945-47 debt averaged 114.65% of GDP. Additionally, areas such as the housing arena continue to deteriorate. February new home starts experienced the largest percentage drop in 27 years, while new home permits were the lowest on records kept since 1960. Compound this with the unresolved foreclosure issue and inflationary pressures, which we believe will ultimately lead to an interest rate hike, residential housing, as one of our clients described, is in the middle of a lost decade. Considering this environment, it should not be surprising that we have witnessed a larger degree of liquidation scenarios in the last year. With this in mind, we felt the following articles are somewhat reflective of the marketplace, and thus offer relevant case studies. We hope you enjoy them.
Consensus Economics, Inc., publisher of Consensus Forecasts - USA, forecasts real GDP to increase at a seasonally adjusted annual rate of 2.5% in the first quarter of 2011, then at a rate of 2.8% in the second quarter. They expect GDP to grow 2.7% in 2011, 3.3% in 2012, and 3.4% in 2013. In the long term, they report that real GDP will grow by an average annual rate of 2.6% between 2016 and 2019. Every month, Consensus Economics surveys a panel of 28 prominent U.S. economic and financial forecasters ("the forecasters") for their predictions on a range of variables including future growth, inflation, current account and budget balances, and interest rates. Click here for the full article In re Yellowstone Mountain Club, LLC, 2010 WL 3222534 (Bkrtcy. D. Mont.) In what the federal bankruptcy court called a "case of naked greed," the owner of a private ski resort for the superrich negotiated a $375 million credit facility from Credit Suisse First Boston, which entailed an immediate $209 million distribution for purposes unrelated to the property. To avoid splitting the cash with his fellow shareholders, the owner convinced Credit Suisse to characterize the $209 million distribution as a loan to the club's wholly owned affiliate, which didn't book the debt until months after the deal closed and backdated the promissory notes. Click here for the full article Bankruptcy Court Prefers Adjusted Balance Sheet Test to Confirm Hard Rock Plan In re Premier Entertainment Biloxi LLC, 2010 WL 3504105 (Bkrtcy. S.D. Miss) Just two weeks after its grand opening, the Hard Rock Hotel and Casino in Biloxi, Miss., was nearly destroyed by Hurricane Katrina. The owners eventually recovered $181 million from their insurers, but disputed their rights to the funds with its first lien note holders. The casino ultimately filed for Chapter 11 bankruptcy because they could not access the funds to finish construction.
Click here for the full article
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