Restructuring officer is a veteran of the game

ASSOCIATED PRESS

He was one of the architects during Kmart’s bankruptcy reorganization of a multiyear business plan and helped revitalize a health insurer and a manufactured-home builder.

Now, turnaround specialist Albert Koch is in for perhaps his biggest challenge yet as GM’s chief restructuring officer.

He’ll be GM’s primary representative while it is in bankruptcy court protection, working to streamline units, sell unprofitable assets and build consensus among management, debt holders, employees, customers and communities.

GM has said its Pontiac, Saturn, Hummer and Saab operations will be either sold or closed.

While Fritz Henderson is GM’s chief executive and the government has a major stake in the future of the company, Koch will be in charge of the restructuring, said bankruptcy expert Jerry Reisman, a lawyer in Garden City, N.Y.

“He got the job through the government, the government is a 60 percent shareholder, the government has put up $30 billion. I would say he calls the shots,” Reisman said.

The position is “an area which has developed over the last 15 years to allow these consultants who specialize in reorganization and restructuring of companies to make plans that will allow the company to emerge as a successful, profitable company,” Reisman said.

The federal government has said it will act as a “reluctant shareholder” and won’t get involved with the day-to-day operations of GM, which will still be Henderson’s responsibility though restructuring decisions would be delegated to Koch, experts said.

Koch’s task is especially difficult because of the short time frame for the case: The government expects GM to be out of court in under 90 days.

“I believe he has complete government support — I would go so far as saying carte blanche — to make this happen,” said Michael Williams, dean of Touro College’s Graduate School of Business.

Koch, 67, is vice chairman and managing director at AlixPartners LLP, a global business advisory firm.

At Kmart, which emerged from bankruptcy protection in 2003 and is now part of Sears Holdings Corp., he led the development of an operating business plan.

Koch was interim president and chief executive of Champion, leading a major financial and operational overhaul and boosting market capitalization and operating results.

He was interim chief financial officer of Oxford Health Plans during a crisis brought on by financial and accounting problems.

He formerly was a partner with accounting firm Ernst & Young and, perhaps key for his role at GM, is well known around the Detroit area, having served as a trustee of the Bloomfield Hills, Mich., board of education.

He also has had various roles at Detroit hospitals.

Koch does have some auto-industry experience.

He is chairman of Polar Corporation, a privately held trucking products and services company.

But S. David Cohen, a professor at Pace Law School who specializes in bankruptcy issues, said it wouldn’t be important whether Koch had a lot of auto experience.

“He would need to be smart and have the ability to make decisions quickly, sometimes difficult decisions,” Cohen said.