Substance Abuse and Rehabilitation Treatment

Situation: $15 million provider of substance abuse and rehabilitation treatment to individuals with locations in FL and CA with an impaired balance sheet and loss of bank group support.

Rinnovo’s Role: CRO

Rinnovo Solution: Filed for Chapter 11 in the Southern District of Florida. Managed all aspects of the Chapter 11 case. Engaged an investment banker and ran a sale process. Business underperformed during the case. We were unsuccessful in the sale process and unable to raise debtor-in-possession financing. The debtors became administratively insolvent and we voluntarily converted to a Chapter 7 leaving approx. $200k in cash in the estate.

 

Pet, Lawn, Garden and Outdoor Living Products Retailer

Situation: $35 million premier pet, lawn, garden and outdoor living products retailer with 12 locations in Connecticut and Massachusetts. The business had stumbled under prior leadership through critical missteps and poor execution. Having ultimately terminated its CEO, the Company had to navigate a management transition.

Rinnovo’s Role: Interim CEO

Rinnovo Solution: Delivered consistent on-site leadership, meeting with team weekly inclusive of marketing, procurement and store operations.  Established and measured progress towards critical business initiatives. Assessed management across company. Completed 2020 budget for Board approval. Hired a new Marketing/Brand Director to re-energize the company’s messaging and digital marketing engagement. Restructured store operations leadership. Led this essential retailer through the COVID-19 response and on-going operating environment.  Developed an operating plan to conserve cash, supplemented by securing a PPP loan. Negotiated rent abatements with each landlord. Assisted in hiring and transition to a new CEO.

 

Wastewater Logistics Service Provider

Situation: Leading provider of wastewater logistics services in the South-Central Oklahoma Oil Province offering a range of services to the oil and gas industry including water disposal, trucking, and pipeline operations. A strategic shift in the business model rendered the trucking operation obsolete. The Board and management sought guidance to manage the orderly liquidation and wind down of the affairs of the trucking subsidiary.

Rinnovo’s Role: CRO

Rinnovo Solution: Assisted in the development of the plan of liquidation and cessation of operations. Worked closely with parent company’s CFO in negotiating outcomes with the senior lender and auction partner. Managed the cash flow forecasting and disbursements. Led negotiations of creditor composition agreements with the company’s trade creditors resulting in $450,000 savings.

 

Premier Free-Standing Portrait Studio Operator

Situation: NC based, $40 million portrait studio operator with 97 free-standing portrait studios located in 29 different states, providing its customers a high quality, personalized in-studio experience. The company filed for bankruptcy in Sept. 2017. The assets sold in a Section 363 asset sale that closed in Dec. 2017. The professional photography industry faced massive disruptions from both society’s transition to online shopping and the evolution of camera phones. The business continued to struggle with the headwinds caused by these disruptions for several years with declining comp sales.

Rinnovo’s Role: Interim CFO

Rinnovo Solution: The engagement was comprised of providing financial leadership in the transition from bankruptcy with activities such as purchase accounting, annual budget preparation and the maintenance of a 13-week cash flow model. Assisted management in the restructuring all of its remaining leases to shorten maturities in order to maintain flexibility. Worked with COO to institute new digital marketing initiatives that slowed customer attrition and identify opportunities for improvement in store operations staffing. Implemented a weekly KPI scorecard. The company had taken the appropriate steps to stabilize and properly position the business for a strategic acquirer to profitably grow the business. Led the effort with the company’s investment banker, management and investors to position the company for sale. Managed liquidity during the process to get to a Dec. 2019 close.

 

Quick Serve Restaurant (QSR)/Specialty Wholesale Food Distribution

Situation: NYC based, $50 million QSR operating 23 fast casual locations and a wholesale food distribution business. The company’s senior lender assumed control of the business after it defaulted on its new credit facility within one quarter after closing. The business struggled for several years with declining comp sales which was reversed under the new CEO’s leadership. The company remained in need of capital to refresh the concept, upgrade the menu and institute new marketing initiatives. Due to fund constraints, the company’s investors were not able to provide the additional investment and the company was required to seek outside investors.

Rinnovo’s Role: Interim CFO

Rinnovo Solution: Originally engaged to assist an inexperienced finance team with fresh start accounting, annual budget preparation and the development and maintenance of a 13-week cash flow model. Partnered with CEO to identify opportunities for improvement in personnel and key processes. Recruited a new Controller to supervise the accounting function. Stabilized the AP process which was a significant problem for the business. Assisted in the implementation of a weekly KPI scorecard. The assignment further expanded into working with the company’s investment banker, investors and CEO to position the company for sale. Managed liquidity during the sale process to get to a close.

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High-End Furniture Retailer

Situation: TX based, $13 million high-end furniture retailer operating 13 stores and a distribution center across 7 states with declining sales, restrictive trade terms and an impaired balance sheet. The company lost the support of its debt holders and was forced to cease operations. Selected as CRO by the constituents to replace a resigning CRO.

Rinnovo’s Role: CRO

Rinnovo Solution: Brought in after the company ceased operations and shortly prior to filing the Chapter 11 case in the Northern District of Texas. Prepared the bankruptcy filing and operational transition into a going-out-of-business (GOB) sale in one week. Analyzed various liquidation alternatives and finalized an agreement with an asset liquidation firm to manage the GOB sale. Working with the company’s secured lender, structured a transaction that recovered sufficient proceeds to pay off the $1.3 million loan balance in full, covered ad valorem taxes and provided for a carve-out for administrative expenses. The estate recovered an additional $300,000 through asset recovery and the sale of select assets including the estate’s interest in certain leaseholds. After completion of the GOB sale, the case was converted to a Chapter 7 leaving $130,000 in cash in the estate.

Fresh Flower Importer/Distributor

Situation: $3 million fresh flower importer and distributor with long-term deteriorating financial performance and extended trade obligations. Took on assignment in June 2020.

Rinnovo’s Role: Assignee in Assignment for the Benefit of Creditors.
A fiduciary role charged with liquidating the assets for maximum value to benefit the estate’s creditors.

Rinnovo Solution: Business had ceased operations prior to the assignment. Project involved collecting all outstanding accounts receivable and administering the estate. Generated $200k in cash through the liquidation of accounts receivable. Distributed a dividend of $130k to unsecured creditors.

 

Scrap Metal Recycler

Situation: Engaged by a $65 million scrap metal recycler seeking to acquire a $40 million distressed competitor in order to expand its geographic footprint. The target company’s trade was significantly extended.

Rinnovo’s Role: Financial Advisor

Rinnovo Solution: Negotiated terms of Creditor Composition agreements with target company’s 300 trade creditors. The outcome of these negotiations was critical in facilitating the transaction. Reached accords with over 95% of the target’s accounts representing over 94% of its past due balances resulting in $500,000 savings. An additional key outcome was securing considerable multi-year supply agreements with several of the larger suppliers.

Sun and Skin Care Product Manufacturer

Situation: $45 million manufacturer of branded sun and skin care products selling a seasonal, guaranteed sale product into the retail channel that suffered from considerable end-of-season returns, tight liquidity, significantly extended trade and an impaired balance sheet.

Rinnovo’s Role: CRO

Rinnovo Solution: Worked closely with critical suppliers to free up supply chain, negotiated with and/or fired unprofitable customers and marketing partners and secured $5.5 million in incremental financing to support the 2015 season. Guided the company through an Article 9 foreclosure sale resulting in new ownership of the company’s assets. Liquidated remaining assets and wound down the business.

Mobile PET/CT Service Provider

Situation: $11 million national provider of PET/CT scanning services with deteriorating financial performance and overall micro- and macro- economic trends negatively impacting the industry and an overleveraged balance sheet.

Rinnovo’s Role: Assignee in Assignment for the Benefit of Creditors. A fiduciary role charged with liquidating the assets for maximum value to benefit the estate’s creditors.

Rinnovo Solution: Operated the business for a period of time post- assignment while attempting to complete a going concern sale. Shut the business down and wound down all of its affairs. Secured all assets, collected all outstanding AR, worked with various state nuclear regulatory agencies to decommission PET/CT coaches, sold the secured and unencumbered coaches at auction, and fully paid down the working capital lender. While in the state court action, the estate was thrown into an involuntary federal bankruptcy filing — successfully navigating the involuntary bankruptcy filing. Made distributions of $4.1 million.

 

Sweetener Products Distributor

Situation: $90 million value added distributor of sugar and corn sweetener products experiencing significant cash burn due to unfavorable commodity contract positions and an underperforming processing plant. The company was under significant pressure from its senior lender after defaulting on its new credit facility one month after closing.

Rinnovo’s Role: Financial Advisor

Rinnovo Solution: Implemented a disciplined cash management process. Coached leadership on steps to improve liquidity and negotiate relief from key suppliers to support continued operations, and restored confidence with its senior lender providing the company with needed time to sell its underperforming processing plant to a strategic buyer.

 

Cat Litter Manufacturer

Situation: $23 million FL based, private label cat litter manufacturer that filed for Chapter 11 in DE in an emergency filing due to a judgment creditors aggressive action. The business encompassed mining operations, processing, packaging, and distribution of private label product into the retail channel.

Rinnovo’s Role: Interim CFO

Rinnovo Solution: Implemented various court-approved initiatives with critical suppliers, energy and other service providers to allow the company to operate within bankruptcy. Worked with the debtor’s investment banker to position the company for a successful Section 363 asset sale. Managed 13-week cash flow and all bankruptcy reporting.

 

Outsourced Operating Partner

Situation: Assigned by a FL based fund to the 3 poorest performing portfolio companies ($20 million in combined revenue) located in CA and TX.

Rinnovo’s Role: Outsourced Operating Partner

Rinnovo Solution: Provided oversight and coaching to leadership. Led numerous operating initiatives to improve performance, managed liquidity, and implemented best practices and financial/cost controls. Led one company through a Chapter 11 proceeding (CA) and Section 363 sale resulting in new ownership/leadership and a restructured balance sheet. Recruited/installed new management at remaining two to improve performance.

eCommerce Electronic and Safety Component Distributor

Situation: $12 million eCommerce electronic and safety component distributor located in So. FL. Took control of the assets in Dec. 2019.

Rinnovo’s Role: Assignee in Assignment for the Benefit of Creditors.
A fiduciary role charged with liquidating the assets for maximum value to benefit the estate’s creditors.

Rinnovo Solution: Operated the business for a short period while pursuing a going concern sale. Generated $2.9 million in cash by selling brands, intellectual property, and inventory to 2 separate parties, and liquidating accounts receivable and certain fixed assets. The results yielded a recovery of 7x greater than expectations. Distributed $2.1 million to the secured creditor.

Confectionary and Grocery Products Distributor

Situation: $100 million distributor of confectionary and grocery products with operations servicing Northern New Jersey, Metropolitan New York and Boston after its CEO and COO were terminated for fraudulent activity. Disclosure of the fraud led the senior lender to freeze its line placing the business at risk.

Rinnovo’s Role: Interim CEO

Rinnovo Solution: After a brief assessment, we quickly implemented a plan to reduce operating costs by $1.7 million annually, sold excess equipment and surplus/obsolete inventory, and rationalized select customers and SKUs, thereby providing the capability to operate with its own cash.

Education Provider

Situation: $10 million provider of outcome-based educational programs and print and digital materials. The company was hard hit by the loss of several key programs and had limited resources to develop and distribute the next generation of print and digital materials.

Rinnovo’s Role: Strategic/Financial Advisor

Rinnovo Solution: Engaged to provide Board advisory and oversight services. Coached leadership on the development of interim and annual business plans, and monitored performance to plan and liquidity. Guided leadership to the development of national network of independent sales representatives for print and digital materials.

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Cable Assembly Manufacturer

Situation: $20 million specialty cable assembly manufacturer struggling with severe revenue deterioration and an impaired balance sheet.

Rinnovo’s Role: CRO/Acting President/CEO

Rinnovo Solution: Significantly reduced costs, restored credibility with key customers, suppliers and senior lender, secured new technical certifications, and restored positive EBITDA. Led the company through a Chapter 11, Section 363 sale resulting in new ownership and a sound balance sheet.

 

Tissue Paper Manufacturer

Situation: $55 million tissue paper manufacturer faced with rapidly rising commodity prices, losing share, poor pricing discipline, inexperienced management and an overleveraged balance sheet.

Rinnovo’s Role: CRO/Acting CEO

Rinnovo Solution: Reduced overhead, managed production to demand, introduced new product, gained key environmental certification, restored credibility with key suppliers and senior lender, and increased EBITDA by $2.5 million. Result was a friendly restructuring of the balance sheet among existing constituents.

Cable & Broadband Contractor

Situation: $50 million contractor to the U.S. cable and broadband industry experiencing rapid growth with limited financial controls, poor working capital management, gaps in management and facing a significant liquidity crisis.

Rinnovo’s Role: CFO

Rinnovo Solution: Quickly reversed a distress situation by aggressively managing the company’s cash flow through stringent financial/cost controls, critical partner/vendor negotiations, and collection of significant past due receivables.  Executed an operational plan that improved cash flow by $6.2 million, reduced long-term debt by $2.6 million and improved working capital by $750,000 in 12 months.

 

Other assignments:

Financial Advisor in activities such as business planning, mergers and acquisitions and the structuring, restructuring, and negotiating various amendments and forbearance agreements to existing credit facilities. Managed and performed various strategic and operational assessments, due diligence reviews, and process redesign and improvement.