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.