CHICAGO, Aug. 14 /PRNewswire-USNewswire/ -- About 80 percent of turnaround professionals surveyed in the latest Turnaround Management Association poll set a 2010 date for an economic upswing even as sporadic signs of a rebound have appeared.

Nearly a third of respondents see recovery sometime in the latter half of 2010 and just over 20 percent expect a turnaround sometime in the first six months. About 20 percent expect recovery delayed until 2011. Of those that expect it to take place in the first half of 2010, opinion was equally split at 14 percent each as to whether the recovery would start in the first or second quarter.

Even in 2010, respondents forecast trouble for businesses that loaded up on debt and now find credit coffers shut tight, with 65 percent expecting corporate default rates and workouts to peak then.

"Most of the companies we are seeing have made dramatic expense reductions but still have not been able to cut enough to meet sharply lower sales levels," said Margaret Good, CTP, and president of the Meridian Group in Pittsburgh. "The result is negative earnings and EBITDA, putting into question the long-term viability of many companies thought to be healthy a year ago."

Respondents were split on whether a recent surge of almost 40 percent in the Dow Jones Industrial Average from its springtime lows influenced a bump in economic indicators such as housing and easier financing for healthy companies. Nearly 50 percent saw a correlation and an equal proportion did not.

"You can't buy your way out of an economic downturn," said Robert Blumenfeld, managing director of Buccino & Associates Inc. in New York. "You need to earn your way out. What we have seen so far are short-term Hail Mary fixes for a long-term problem."

Only 13 percent think business is recovering, but less than five percent observe sales returning to normal. Roughly 10 percent think lending is easing for troubled companies.

"The new bankruptcy law has made it harder to reorganize mid-market companies in this period of tight credit. More companies are likely to be liquidated than reorganized than ever before,'' said William Hass, CTP, chairman and CEO of Teamwork Technologies in Northbrook, Illinois.

The Chicago-based Turnaround Management Association has nearly 9,000 members in 45 regional chapters who comprise a professional community of turnaround practitioners, attorneys, accountants, investors, lenders, venture capitalists, appraisers, liquidators, executive recruiters and consultants.

SOURCE Turnaround Management Association