Disaster Recovery
in Memphis
Mary Ann Lee
Ronald Pierotti
New Madrid Fault History



New Madrid seismic
zone
Powerful New Madrid
earthquakes in the
early 1800s
Probability of another
catastrophic
earthquake is 40% to
60% within the next
15 years
Epicenters of earthquakes
New Madrid fault vs. San Andreas fault
AutoZone Corporation



IBC 2000
Recent analysis
of costs vs.
benefits
AutoZone
Corporation
MLGW

MLGW is prepared for a major
earthquake:
 Retrofitted
electrical substations and waterpumping stations
 Installed generators
 Replaced water pipes
 Secured equipment
 Simulated earthquake scenarios
If we’re not prepared?

Northern California was prepared:
 62

dead; $6 billion in losses
Armenia was not prepared:
 25,000
dead; $20 billion in losses
University of Memphis
Before the Big One Hits

Personal Preparedness
 Be
familiar with the emergency procedures for other
family members: spouse, children, parents?
 Prepare
earthquake kits for home, office, car
 Know
how to make your home safe if damaged in an
earthquake.
 Know
the emergency services available to you and
how to contact them.
Before the Big One Hits

Workplace preparedness
 Know
who is in charge, and under what
circumstances are you in charge.
 Know
your company’s Disaster Recovery Plan
(DRP). These are sometimes called
Emergency Management Plans (EMP)
 Business Continuity Plans (BCP)

What is a Disaster Recovery Plan?

A Disaster Recovery Plan is a complex set of
analyses, preparations and procedures with a single
goal: Keep the business running after a disaster
occurs while helping it resume normal operations as
quickly and intelligently as possible.

A Disaster Recovery Plan is not an inventory of
existing systems nor is it a guidebook for duplicating
those systems. It is an action plan for providing key
corporate functions with the capabilities they need
when they need them.
What does a Disaster Recovery Plan
protect?
People
Information
Equipment
Does anyone remember Hurricane
Elvis?
Assess your preparedness now!
As controller, you should not be responsible
for creating the disaster recovery plan.
While you may participate in the creation
of a recovery plan, all areas of the
business should be in on the process to
ensure all important assets of the
business are protected.
Assess the preparedness of your
Key Suppliers and Service
Providers

My company’s primary suppliers:
Goldman Sachs – New York
Merrill Lynch – New York
Societe Generale – Chicago & New York
JPMorganChase – Chicago & New York
Under what conditions could your
business run?
A Memphis Radio Shack after Hurricane Elvis
Things Typically Found in a DRP
Chain of command
 Offsite operation details
 Data storage retrieval instructions
 Access to funds information

All details should not be published, many
items are on a need to know basis.
What’s a controller to do?

In a disaster situation, your primary responsibilities
as controller will be:
 Establish
cash flow
 Will access to funds be needed to obtain office space,
storage space, etc.?
 If your company has a backup operations facility, will you
have funds to get people there?
 Can you still make your payroll?
 Safeguard assets
 Can the company prove ownership of assets?
 Do you have copies of contracts/agreements you will
have to enforce during this time?
Before the Big One Hits
 Know
your office: After the San Francisco
earthquake, tenants in an office building were
given 15 minutes to grab what they could
recover before the building site was closed
and the building demolished.
If you had 15 minutes to grab things
from your office, would you know what
Keys to safe deposit box
to take?
and fire proof safe
Checkbook
Hard copy of most
recent financial
statements
Contracts & asset
ownership document copies
Watkins Uiberall Fire 2002

Partner Michael Uiberall says, “The most
important thing when you have a fire—or any
disaster—is to have a chain of command.”

Fires started by arsonist, offices became a crime
scene and was cordoned off by police

Key factor was clients ability to get through to
someone with information when they heard about
the fire.

No disaster recovery plan in place, but did have list
of all 60 employees phone numbers off site.
After the Big One Hits
Keep personal safety in mind as your top
priority at all times. Your safety should
never be compromised for the sake of
your company, no matter what your level
of responsibility.
 You can’t plan for every contingency, but
you can reduce the stress of a disaster
somewhat by making decisions before it
hits.

After the Big One Hits

Secure your home and family
 Follow
procedures established beforehand to
secure your home and possessions.
 Be realistic about the effects and know how to
handle them. In earthquake situations, there
are many:




Fire
Looters
Aftershocks
Lack of communications and utilities
After the Big One Hits

Follow the disaster recovery plan

Establish a clear chain of command

Establish an information center that can keep
employees, clients, and suppliers informed

Document as much as possible
Conclusion
Be prepared.
 Know your company’s plan.
 When it happens, follow the plan.

Trivia Time!!!

During which part of the year would an
earthquake cause the most damage to
Memphis?
Trivia Time!!!

How many of the 20 largest US
earthquakes have occurred on the New
Madrid fault?
Trivia Time!!!

What local lake was created by the New
Madrid earthquakes in the early 1800s?
Trivia Time!!!

The University of Memphis Center for
Earthquake Research and Information is
located on what street?
Trivia Time!!!

If the two Memphis bridges were
destroyed in an earthquake, where would
the nearest bridge across the Mississippi
be?
Trivia Time!!!

What is the probability of another major
earthquake hitting Memphis within the next
15 years?
Trivia Time!!!

What was the first building in the Central
Mississippi Valley to use base isolation,
the state-of-the-art engineering design that
reduces damage by cushioning buildings
against earthquake shaking?
Sources
CERI: Center for Earthquake Research
and Information
 USGS: United States Geological Survey
 CUSEC: Central United States Earthquake
Consortium
 Wikipedia
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