PARTNERS CHOOSE PATHS TO ENSURE TURNAROUND.

Byline: Joe Mosley/The Register-Guard

There have been some elements of luck, but the turnaround at Tsunami Books has gone beyond happenstance in the year since its owners announced they were too far in debt to continue the business.

Founders Scott Landfield and David Rhodes - along with 33 customers who stepped forward as shareholders to recapitalize the bookstore - all have had to choose some correct paths to make their unique restructuring plan work.

"Managing that many partners is a challenge," says Randy Swangard, director of the Charles H. Lundquist Center for Entrepreneurship at the University of Oregon.

"We're not dealing with Hyundai here, but that many individuals involved in the enterprise is pretty unusual."

Swangard, the bookstore's owners and its new shareholders all agree that the alignment of stars that led to the salvation of Tsunami would be difficult to reproduce.

For one, the bookstore is blessed by a clientele that considers it more a community institution than a business.

Those same customers, when they chipped in money to become shareholders, made clear that their priority was the store's preservation rather than its profit margin.

But as the shareholder plan began to come together last summer, Landfield made some decisions he considers critical in the rebound.

He brought in a professional facilitator to keep ideas moving during an initial meeting of 28 potential investors.

He hired a lawyer - James Lee von Boeckmann of Eugene - to help draft a shareholders agreement that clearly laid out expectations for the restructured business.

And, after a false start involving a large-scale investor from out-of-state, Landfield and others hand-selected a group of local shareholders who are content to abide by his day-to-day operational decisions.

"The first lesson we learned that is absolutely essential is community ownership," Landfield says.

SEE: SAVED BY THE BOOK: A wave of local support flows in to sustain Eugene's Tsunami Books / A1