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.
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.