No less than 98 percent of the experts said they expect that a “big spike in corporate restructurings is on its way,” following the credit crunch of recent months, while 65 percent predicted that that spike in company failures will happen by this winter. Among those who think the uptick will come sooner rather than later, 16 percent said they are looking for it by this summer while 30 percent said by this fall.

In response to an open-ended question about which three industries are most likely to face the most distress in the year ahead, 23 percent singled out retail, 15 percent said financial institutions 12 percent said transportation including airlines and 11 percent said home building and supply, with automotive, consumer goods, publishing and real estate among a total of 19 industries mentioned in all.

The experts also were not sanguine about when they expect today’s credit crisis to subside. Responding to the question “When do you expect the current credit crunch to subside to the point that markets are back to ‘normal’ again?”, 65 percent said “normal” won’t return until 2009, and another 19 percent said it will be beyond 2009. Only 2 percent said this fall, while none said by this summer.

Those surveyed were more bullish, however, on the outlook for private equity in America, despite the woes many private-equity firms are today feeling. In response to the question “Has the credit crunch permanently altered the viability of private equity in America?”, 80 percent said no. However, by the same token, 80 percent also said that the credit crunch has made it “imperative” for private-equity firms to do more to actually improve the performance of their portfolio companies than in the past.

Also of note: 74 percent of those surveyed predicted that there will be more government intervention in the financial markets in the year ahead, following on the heels of the Federal Reserve’s mid-wifeing of the sale of Bear Stearns Cos. Inc. to JPMorgan Chase & Co. earlier this spring.

“Clearly, the credit crunch has exacerbated problems that many companies in this country were already facing,” said Peter Fitzsimmons, co-president of AlixPartners and also co-lead of the firm’s corporate turnaround practice. “It seems inevitable that corporate defaults are going to rise this year, the only questions being how high, for how long and which companies in which industries. In this environment, the smart companies will be those that take preventive measures, not those that wait until trouble has already struck.”

About AlixPartners
AlixPartners is a leading global business-advisory firm offering services across four main disciplines: operational performance improvement, financial restructuring and bankruptcy reorganization, litigation consulting and financial advisory services. The firm’s expertise is in helping clients anticipate, evaluate and successfully resolve urgent, high-impact business challenges across an increasingly complex legal, regulatory and economic landscape. Drawing on the experience of more than 700 employees from 13 offices across North America, Europe and Asia, the firm commits small teams of seasoned professionals to deliver results when it really matters. For more information, visit www.alixpartners.com.