INDUSTRY – Distribution
COMPANY – A value added distributor of millwork for the commercial and residential building industry.
PROBLEM – This company was experiencing bank and general creditor problems along with losing money each month. Several trade suppliers had secured judgments and were starting receiverships to collect.
RESOLUTION – Completed an operational and balance sheet restructuring. Acquired the assets and business in a ABC (“Assignment for the Benefit of Creditors”). The result was a reduction of the debt level from approximately $1.9 million to under $700,000.
Implemented several operational changes including decreasing expenses, increasing outflow of products, improving collections of accounts receivable and eliminating unprofitable customers. In addition, the owner of this troubled company had several personal guarantees which were resolved by the new company.