GlassRatner sees dark side of business world

Ian Ratner’s upbeat personality seems at odds with his world view.

“My world view,” said Ratner, “is that everything is one big Ponzi scheme.”

Ron Glass is sympathetic. He gets why Ratner feels that way.

The two are principal partners in the Atlanta firm that bears their names and specializes in forensic accounting and financial analysis.

It’s the kind of analysis that causes banks to pull loans, hedge funds to pull money out of investments and investors to think twice.

“Ian thinks everybody is a criminal,” said Glass. “We just see so much fraud, and fraud is criminal.”

GlassRatner Advisory and Capital Group specializes in four areas: bankruptcy and restructuring; forensic and litigation accounting; mergers and acquisitions; and real estate advisement.

The firm often works with attorneys, banks, hedge funds, other investors and companies that need to analyze businesses they own or want to buy. It also helps sell surplus or distressed properties and represents creditors or banks in bankruptcy cases. Glass, for instance, was appointed by a bankruptcy court to run a large apartment business as it restructures in bankruptcy.

The consultancy started about 10 years ago when the economy was humming. In 2001, Glass was assigned as a receiver -- a person appointed to handle the affairs of a company in bankruptcy -- on a large case and he needed Ranter’s expertise.

After that came the dismantling of a large chemical company, and then banks and real estate companies started failing. The pair hasn’t had a dull day, or a lack of clients, since.

GlassRatner has managed more than $2 billion in real estate assets and advised on more than $20 billion in debt just in the last few years. Has it profited from the downturn?

“Absolutely,” said Glass.

It has grown to 60 employees in five cities, with 40 in the firm’s Buckhead office.

The Deal Pipeline, a publication about deals, private equity firms and venture capitalists, ranks GlassRatner second among the nation’s top crisis management firms. First is FTI Consulting Inc., of West Palm Beach, Fla., and third is New York-based Alvarez & Marsal.

Glass, 64 and a native Atlantan, majored in business administration with a focus in real estate at Georgia State University. He then spent nearly 18 years working for noted investor Sam Zell. He learned how to ask questions and see the bigger picture.

“Sam used to say to me often, ‘What did you see out there?’ “ said Glass. “Then he would ask, ‘What does this mean to me about what’s going on the world?’ I think a lot of people don’t connect the dots.”

Ratner, a native of Montreal, was a forensic accountant for Ernst & Young, and later for Kroll Inc., a risk mitigation firm.

“We have very different skills, but we usually come to the same conclusion,” said Glass.

Glass likens their jobs to being firemen: when disaster strikes, they have to be ready.

And they have stories to tell.

“Like the time we found a marijuana grow house as a tenant in an industrial property,” said Glass, recalling that one of his team members stumbled into the pot farm while surveying the property for a bank. Growing marijuana is legal in that state, he added, but the tenant was a surprise.

“Or the time at an apartment property where when you walked in front door, everything was fine, but open the door to one of bedrooms, and you would have fallen down on ground,” said Glass, who saw that property personally on behalf of a bank. The loan also was in default. “There was no floor joist or flooring. Nothing. It was just floor space. We don’t know what happened.”

There was also that time when they sold an entire chemical plant to a firm in India, said Ratner. It was dismantled and put on a barge in Louisiana, then sailed across the seas to India, where it was put back together.

But the firm also sees the heartbreaking side of things.

At a textile plant that closed, Glass said he made sure employees were paid pay for vacation time.

“Some of these checks were only $100 or $200,” he said. “But many of them had been making minimum wage, so a check for $100 is meaningful for somebody who is struggling.

“I think I probably could have run for mayor in a certain city in Alabama and gotten elected that week.”

The trick now, Glass said, is to prepare for the turnaround.

“It’s a matter of trying to look around corners,” he said. “It’s not a matter of being perfect. It’s a matter of being ready for when the world is terrific, whether that’s 2011 or 2012.”

AT A GLANCE

GlassRatner Advisory and Capital Group

Headquarters: Atlanta

Other offices: Las Vegas, Miami, New York, Orange County, Calif.

Employees: 60

Examples of work:

** Retained by the Federal Deposit Insurance Corp. to sell $165 million worth in residential construction loans from a subsidiary of the failed Net Bank, the Alpharetta institution shut by federal regulators in 2007.

** Managing the reorganization of Miles Properties, a major apartment owner that owes $18 million to its 20 largest creditors.