Case Studies
Industries: Manufacturing, Apparel
Primary Services: Crisis Management, Interim Management, Business / Operational Assessments, Liquidation / Business Wind Down
The Company was a $200 million publicly traded Designer, Manufacturer, and Distributor of Apparel headquartered in New York City.
The Company had defaulted on its line of credit and faced a severe cash liquidity crisis. Another consulting firm had recommended to the Company’s Board of Directors that a liquidation of the Company, which would have resulted in an estimated $20 million loss to creditors, was the best course of action. While the Company’s lenders, who were anticipating a loss of about $10 million, had agreed to this strategy, the Board of Directors wanted to be assured that this was the most responsible course.
The Board of Directors hired our experts to conduct an independent assessment of the situation. Our evaluation indicated that either a turnaround or sale in the ordinary course would produce a better outcome for all of the constituents. Our experts were installed as interim COO and CFO. After an additional analysis of the Company’s financial statements, we uncovered accounting irregularities which resulted in restatements of earnings totaling $30 million. Our experts concluded that a wind down of the business was in order and all divisions of the Company were sold off in five separate transactions. As a result of our actions, shareholders saw a return of $7 million after full settlement with creditors. Furthermore, job losses were minimized because the divisions were sold as functioning and viable business units.
Brian F. Gleason, CTP
Senior Managing Director
Strategic Advisory Practice
+1 610 659 8118
[email protected]
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