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.
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.
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.
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.
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.
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.