Patricia Caldwell is one of four partners in Gordian Group, a financial advisory firm located in New York City that specializes in the restructuring of financially distressed companies. Gordian works with troubled companies, their creditors and other constituencies in out-of-court restructuring and bankruptcies. Patricia was part of the group who originally founded Gordian Group in 1988, mainly because of their belief that troubled financial times were ahead due to the extravagant lending practices and leveraged buyouts of the 1980s. The company came about as the result of discussions she had with others in the financial industry. "I was fortunate that one of my colleagues had raised the financing to get started," she says. "I happened to be in the right place at the right time."

Generally, the companies that seek Patricia's services have in excess of $100 million of debt. Often the companies are in default with their creditors. The companies want to continue in business and need help developing and implementing a financing plan. In some instances, the company may file for Chapter 11, which provides ground rules for rehabilitation. Patricia and her firm help the troubled companies negotiate with creditor groups, who may also hire financial advisors to represent them in the negotiations. For example, Patricia worked for two years with defense contractor, Tracor, developing a restructuring plan and negotiating the plan with creditors. The final plan, which was implemented through a pre-negotiated bankruptcy, entailed selling one Tracor's divisions and splitting the remaining company into newly created public companies.

"The mathematics used to solve these financial problems is not sophisticated," she admits. "However, I think my ability to think logically, solve problems and look for creative solutions is the result of my mathematics training." She finds at times even the most obvious mathematical solution is met with skepticism and mistrust. For instance, while working with Zale/Gordon Jewelry and its numerous creditor groups, a settlement was negotiated that allocated shares of reorganized Zale among the various groups. Since the creditors had different kinds of claims, the value of each dollar of claim was determined relative to the other claims. The settlement was originally determined based on estimated claim amounts. "However," she says, "when the final claim amounts were determined, they were dramatically different than the original estimates and the settlement had to be recalculated. Our explanation of how to do this using simultaneous equations was met with suspicion, and eventually we had to demonstrate the method using a simple example." Another example, is Gordian's use of regression analysis to determine the "fairness" of certain financial transactions.

"I became interested in finance because of my mathematics background," Patricia says, "and I believe I was viewed favorably when I went into finance because of that background." After receiving her B.S. in mathematics from Virginia Polytechnic Institute and State University, she worked at AT&T Bell Labs for two years as a financial analyst. However, her interest in business led her back to school where she received an MBA from the State University in New York at Albany, with a specialization in Management Science. "I wanted to be part of an organization where finance is the primary business," she says, "rather than a staff member of a finance department of a company." That is why Patricia joined Citibank after obtaining her MBA. There for 13 years, she was a lending officer, and, before she left to start Gordian Group, founded and ran Citibank's Corporate Finance and Analysis Department. She recommends that students in the mathematical sciences interested in a career in finance take some economics and business courses to get a flavor for the areas where mathematics is applied. She believes these courses, with their quantitative content, are usually easy for the mathematics majors to grasp. Investing in the stock market and checking the business section of the newspaper is also a good way to learn about what goes on in the financial community.

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