Mastering Corporate Turnarounds: Jeffrey S. Stein on Restructuring, Resilience, and Business Revival

With continuous technological advancements and changing market landscapes, companies find that transformation and restructuring are critical to long-term success. These processes involve reevaluating and realigning operational strategies to enhance efficiency, competitiveness, and resilience amid economic uncertainties.

Effective restructuring optimises performance and strengthens financial foundations, enabling businesses to navigate challenges and seize growth opportunities.

To provide insights into these crucial aspects, we turn to Jeffrey S. Stein, Chairman of the Board at Ambac Financial Group, Inc. Mr. Stein brings a wealth of experience in corporate restructuring, having served as Chief Executive Officer and Chief Restructuring Officer for notable companies such as Rite Aid Corporation and GWG Holdings, Inc.

He is also the Founder and Managing Partner of Stein Advisors LLC, a financial advisory firm dedicated to supporting businesses and institutional investors. With a distinguished background in economics and finance and his Certified Turnaround Professional (CTP) designation from the Turnaround Management Association (TMA), Mr. Stein offers a unique perspective on the challenges and opportunities associated with business transformation.

Check out our full interview with him below to better understand his leadership style in the financial space and what are his corporate advice for entities who find themselves navigating these complexities:

Aiding in Corporate Efforts for Transformation, Restructuring

Why do companies bring you on to help them in their efforts to drive meaningful business transformation and much-needed financial restructuring?

Jeffrey: I am generally engaged by companies that are experiencing some form of financial, operational, legal, and/or regulatory distress. The causes of this distress vary by company and are both idiosyncratic (e.g., ineffective management, lack of strategic direction, excess debt leverage, failed M&A) and systemic (e.g., economic recession, depressed capital markets, geopolitical upheaval, commodity price fluctuations).

One of my core competencies is assessing extraordinarily challenging and complex situations and rapidly determining the company's value-maximising path forward. I can accomplish this by serving in one of several capacities, including CEO, CRO, and/or Chairman of the Board.

On Developing Skills to Solve Complex Challenges

How did you develop this strategic skill and unique perspective, which helps companies overcome serious fiscal challenges?

Jeffrey: I have been active and engaged in the "distressed and special situations" investment vertical for my entire career, which spans over 32 years. For the first part of my career, I was an investment analyst, and portfolio manager focused on developing a deep understanding of the underlying fundamentals of prospective investment opportunities across capital structures and business models.

This approach provided me with the foundation necessary to ultimately transition into corporate director and executive management positions. However, the lessons learned growing up with a father in the textile industry (a ruthless business by any measure) provided the most valuable skills that I employ today—the ability to assess what drives people's behaviour and to use that knowledge to accomplish key strategic objectives.

What Is Rewarding on This Job?

What do you personally find most rewarding about helping companies get back on their feet financially?

For me, the most rewarding aspect of every engagement is ensuring that we accomplish the primary objective of maximising the value of the enterprise on behalf of ALL constituents (i.e. lenders, bondholders, unsecured creditors, suppliers, regulators and employees). This is an extremely difficult task as each constituent has its perspective on "value maximising", and it is incumbent upon me and our team (including both internal executives and external professionals) to remain steadfast in exercising our independent judgment to achieve the optimal result.

Can you share some of the success stories that stand out to you?

Ambac Financial Group, Inc. (which served as CEO of the parent company, Executive Chairman of the insurance company subsidiary, and Chairman of the parent company's board) recently announced the sale of its legacy insurance business (Ambac Assurance Corporation) for over $400 million in equity value after approximately 12 years of ongoing restructuring and risk mitigation.

Whiting Petroleum Corporation (served as CRO) filed for bankruptcy in April 2020 at the onset of the COVID-induced global pandemic. We successfully developed and implemented (in only six months) a plan of reorganisation to de-lever the balance sheet and ensure adequate liquidity for the company to operate in one of the weakest oil and gas markets in recent history. To my recollection, we achieved this without permanently terminating a single employee.

A Story of Revival from Edge of Extinction

Can you share how you brought RiteAid back from the edge of extinction, helping to save thousands of jobs and one of the country's most beloved pharmacy brands?

Rite Aid Corporation, where I served as CEO and CRO, was one of the most challenging and complex matters I have ever pursued. Both the business and the balance sheet required a global transformation and restructuring.

Rite Aid was founded in Scranton, PA in 1962. The Company experienced decades of extraordinary growth and success. However, increased competition for front-end products (both online and bricks and mortar) coupled with the unrelenting reduction in prescription reimbursement rates from health insurance companies and pharmacy benefit managers created an unsustainable operating environment that ultimately concluded with Rite Aid filing for Chapter 11 bankruptcy in October 2023.

We executed the sale of several non-core assets (including our pharmacy benefit management business Elixir), negotiated an amended pharmaceutical supply agreement with our most crucial vendor, closed and/or sold approximately 900 stores, renegotiated leases for most of the remaining approximately 1,300 stores, restructured both the corporate and field organisations to lower costs and improve operating efficiency, saved an iconic brand and retained over 20,000 jobs.

***

With decades of experience navigating complex financial and operational challenges, Jeffrey has consistently demonstrated the critical importance of financial restructuring and business transformation in restoring corporate stability and unlocking long-term value. By leveraging a strategic, results-oriented approach, Jeffrey has guided companies through some of the most turbulent market conditions, addressing both systemic and company-specific distress.

Through thoughtful leadership, a deep understanding of financial fundamentals, and a commitment to maximising enterprise value, Jeffrey plays a pivotal role in helping businesses emerge stronger, more resilient, and better positioned for future success.