Client company was losing money and faced difficulties meeting its payroll obligations. Company was unsuccessful in getting any more funding either from lenders or from equity. Strategized with management to develop reorganization plan and began Chapter 11 reorganization proceedings.

Company successfully emerged from Chapter 11 process within 12 months of entering it due to its ability to reduce labor and manufacturing costs while maintaining most of its revenue base. Employee, customer, ownership and vendor morale was restored.

Recruited by Redlake’s Chairman of the Board to attempt to turn around the company, which had almost $1M in debts and approximately $150K in assets. Lack of access to capital and its subsequent ability to deliver product to customers was the largest barrier to turning around the company.

As acting COO/CFO, negotiated a receivable line of credit and began a product manufacturing scheduling process. Cut costs wherever possible on an item-by-item basis, including strategically eliminating personal payroll by joining Montgomery Financial Management and “outsourcing” the COO/CFO function. As part of overall turnaround strategy, determined to seek Chapter 11 reorganization.

Cost reductions and increased marketing efforts resulted in 9% revenue increase and 10% cost reduction, allowing the company to post first profit in two years. Company’s profitability attracted a buyer, so it could emerge from Chapter 11.

Company had not posted a profit in five years, and was running at a cash negative position. It was over-staffed, and management did not have the knowledge to fix the problem.

Analyzed financial data, cost drivers and payroll information to develop reorganization plan that required layoff of nearly 50% of staff. Held a management meeting to unveil the plan and began execution of it the following day.

Reorganization process led to the company posting its first profit in five years and accumulating more than $1M in cash within the first year. Company continues to be successful and remains the largest software provider to local and state governments in Ohio and Indiana, a position it has held for the last 15 years.

A competitor of Manatron was in the process of Chapter 7 liquidation and one of its assets was property and tax software, which included some major customers utilizing the software in Florida. Largest competitor was also involved in the bankruptcy sale and was to bid on the sale of the assets.

Sale was not a strong balance sheet purchase, but truly a customer acquisition purchase and a place to sell Manatron’s next property tax software. Thus, some internal forces were opposed to the sale due to its impact on the balance sheet.

Negotiated with US Trustee to provide a sales bid that was favorable to both the court and Manatron. Swayed internal forces through the acceptable bid and acquired the product line and customer base in Florida.

Immediately increased revenues by $1M+ and gained control in a key state for newly developed tax software product line. Acquisition was critical factor in total revenue increase of more than 50% in just three years. Manatron is now the leading property tax software provider to Florida.

Vista Pointe Holdings (VPH) was exploring potential acquisition of $2.1M revenue division of a $90M revenue company, and faced challenge of finding a traditional lending source willing to finance the purchase of a software company for a price of $1.5-2.5M with only approximately $100K of “hard assets.”

Negotiated $1.5M purchase price loan and $500K working capital line to allow VPH to buy the assets of the software company with no money down. Procured the bank line by offering the bank an effective 19% interest in the software company through utilization of payment obligation that stated the bank would get 19% of the value of the sales price when the company is sold as a kicker to the loan.

Company was acquired and its revenues grew from the $2.1M as a captured division to $3.5M as a standalone company in four years, an increase of $1.4M (67%). VPH reaped $900K+ profit when equity position in the software company was sold.

Company had a dual set of accountants operating: one in mass appraisal offices in Dayton, OH and the other in corporate offices in Portage, MI. Faced with outdated software system and political ramifications of loyal employees in Dayton and a Controller who resided at the Dayton office.

Streamlined accounting process in Dayton and corporate HQ, and cross-trained employees at HQ on the duties performed in Dayton. Reviewed new accounting software products that were client-server-based (“thin” client), selected one and converted from old accounting system to the new one.

Moved all the general accounting functions from Dayton office to Portage within a year. Through this process, reduced accounting and payroll costs by approximately 25% and increased productivity within the departments by more than 30%.

Housing all the general accounting functions in the corporate office allowed better access to data by corporate officials. Also allowed access to the field through utilization of the thin-client environment for regional management to access accounting data and leave cost-accounting function in the field.

A subsidiary of Manatron was processing payroll for 1,500+ employees, and calculating production units and efficiency, through a paper timesheet that was faxed into the offices biweekly. Needed to convince field-level management and general manager of the subsidiary that a new system was necessary and to think “outside the box” regarding developing a new, more efficient methodology for reporting labor and production.

Worked with a software development firm to create an IVR (Interactive Voice Response) system that was utilized for all employees to report their time and production on a daily basis. Interfaced new software with ADP payroll service and new accounting software.

This process contributed to the reduction of accounting and payroll costs by approximately 25% and increased production by more than 30%. New system enabled automatic download of all payroll and expense reimbursement information to ADP and transfer of financial and production information to the company’s GL system.

80% of shareholders of Vista Pointe Holdings (VPH) wanted to sell their holdings in a relatively successful practice management software company. One of the principals, a 20% equity owner, believed that the sales price offered was too low and wanted to hold out for a higher price.

Strategized with President of the software company to create a pseudo leveraged buyout (LBO) concept to buy individual equity positions of the four VPH principals and one other major shareholder, and allowed fifth VPH principal to retain his equity with strong minority shareholder rights.

Deal resulted in the 80% shareholder group receiving an additional $700K over what they had paid for the company ($175K for each 20% shareholder who owned 13% of the practice management software company beneficially), and minority 20% beneficial shareholder receiving $200K over what he had paid. Also allowed 20% principal to maintain 13% beneficial ownership in the company with minority shareholder rights and protection for any downside event.

FutureCall, LLC (a corporate holding) was an underperforming teleservices company that was unable to continue debt service on its bank debt, which totaled approximately $12M. Eight banks were involved in the consortium that formed the bank debt—garnering complete agreement would be difficult, especially after $40M outstanding loans to the company diminished to $14.5M through the sale process of the company involved.

Created and presented reorganization plan to the lead banker that outlined company turnaround, plus a liquidation analysis showing the value of the company as it currently exists. Lead banker accepted analysis and agreed to defer past due principal and interest payments and allow interest-only payments for the next six months. He championed the plan to the other banks and they agreed to the above actions.

Actions saved the company $400K+ in total cash, and allowed the company to “weather the storm” in conjunction with negotiated concessions from other vendors.

Click Dot Care was having cash flow difficulties and VPH (holding company) determined it could not continue the company without cash flow certainty to cover expenses. VPH had an A/R line of credit; however, this line of credit had individual customer limits and an overall total limit. The major customer, who provided about 90% of revenue, was far in excess of what the financing company would finance.

Initiated face-to-face meeting in NY with largest customer to discuss the situation: the only alternative for continued operation was for them to pay for work-in-process on an estimated basis during the week that the work is being performed. Actual price would be reconciled in official invoices the following week.

This resulted in increasing cash flow by approximately $200K and allowed enough cash on-hand to keep up with payroll and trade creditors. Initial “hit” on the advance payment was worked down over a few months to the point that the outstanding balance was eliminated.

FutureCall, LLC, a $40M teleservices company, was faced with its bank canceling $3M line of credit. Company was in the midst of a turnaround and still had operating losses and negative cash flow.

Established good relationship with A/R financing company with experience in teleservices industry, that truly understood the industry as opposed to the bank. Negotiated a $3.5M A/R line of credit that essentially provided the same amount of operating cash flow to the company at an interest cost that was approximately the same as the bank financing.

New line of credit allowed for $500K, or 17%, excess cash over the previous line of credit and allowed the company to continue functioning normally.

Largest client lost its major customer and was going to be forced to shut down operations. Company needed accounting and payroll staff to complete its duties in regards to processing payroll and final accounting entries.

Leveraged good will and personal relationship established with key employees to have them continue working for the company on a contract basis and at a reduced pay level. Employees completed the necessary tasks for the wind-down of the company. Assisted key employees in finding employment elsewhere.

Purchase agreement for a medical billing company acquisition had a working capital agreement section, which required an audited “true up” at some point after the purchase date to determine the amount of additional funds paid the seller or refunded to the purchaser.

Accounting staff was inexperienced and records incomplete to perform an analysis of the working capital condition of the company at the closing date. Performed internal audit of all working capital accounts to substantiate the balances, and then consulted external audit firm to complete audit to “bless” the findings.

Determined that the holding company was due approximately $9.4M of purchase price reimbursement due to deficiencies in the agreed-upon net working capital balance versus what the audit revealed. Reimbursement was nearly 56% of $17M total cash purchase price paid for the acquisition, and helped with the cash flow required for business survival based on the impairment of assets acquired.