Interim Management Engagements
Interim CEO,
Healthcare Company
An
engagement in which we served as Interim CEO of a healthcare Company that was
an established provider of home healthcare professionals via its twenty-eight, independently
owned franchises throughout the United States. The Firm’s involvement arose
from a series of negotiations and a forbearance agreement between the Company
and its secured lender. In addition to its franchise business, the company,
through its owned locations in New York, New Jersey and Florida, provided
similar home healthcare services to private patients, hospital organizations
and nursing homes. Gross annual revenue
from these activities approached $50 million.
The Company faced
significant financial and operational challenges as both the regulatory and a
business climate were changing and was in crisis. This created a challenging environment in which to operate a
financially viable healthcare enterprise.
Its term loan was in default, it had significantly over-extended its
credit line, including alienating its lender by its business practices, and it
was in serious operational disarray.
Senior management did not have the experience or will to timely address
and make the complex decisions necessary to correct the financial, legal and
operational problems that it had developed and The McManigle Company was
engaged to provide direction, leadership and to implement solutions to highly
complex issues.
The following is a
summary of the most significant issues faced in this engagement: A system wide, billing and accounting
software package was failing; former management had embarked on an ill-advised
course to divest itself of its franchise operations; the company was
"bleeding borrowed cash"; there were no controls on cash or
purchasing; and, overall accounting practices were poor; accounts receivable
reconciliation was non-existent; budget forecasting was inaccurate; the company
did not know the balance outstanding on its credit line; mid-level managers
were un-focused and ineffective; and, the company's financial operations center
in New York, comprised of billing, collection and accounting was disassociated
with the corporate headquarters located in Ohio. Within one-month of
extraordinary effort, we had nominally stabilized the company, but had also
determined a successful turnaround could not be accomplished. We quickly developed an effective
non-bankruptcy alternative and implemented the plan.
This non-traditional type
of solution was necessary due to several factors. The first was the nature of
the company's operations, including its obligations to its patient's well being
and its compliance with regulatory mandate.
Another factor was the need to gain adequate control of the business enterprise
while reducing cash diminution. The
third significant issue was the complex and difficult resolution of the
financial and legal issues between the company, its franchisees and its
creditors.
During our year–long
tenure, we were successful in resolving all these and related business,
financial and legal issues while stabilizing company owned operations. We worked with remaining management to be
more responsive, pro-active and goal oriented.
We installed an Interim CFO who successfully reconciled the Company’s
books and records and provided financial credibility. We provided responsible corporate governance, implemented a
franchise settlement strategy, and provided credibility with the company's
lender who continued to fund operations that were necessary to implement a
non-bankruptcy winddown and reduce overall liability while controlling
cash. To accomplish all these tasks,
cost and purchasing controls were implemented and disbursement procedures
enacted, including enhanced operational and financial reporting
requirements. Real property lease
settlements were successfully negotiated and creditor issues resolved.
In respect to the sale of the
company's assets, we devised a successful "fast-track" marketing and
sales strategy. The Company closed its
New York operations under a formal plan of closure designed to meet New York
State regulatory guidelines and sold its New Jersey operations. Most
significantly, we developed and directed a strategy that led to franchise
settlement and termination agreements with all twenty-eight franchisees. These
efforts allowed the secured lender to recover a significant amount of its
outstanding accounts receivable generated by the franchisees, while eliminating
future complex litigation and litigation costs.
President &
Director, Oil & Gas Company
A
Principal of The McManigle Company served as President and sole director of
this Texas Corporation, that was the wholly owned subsidiary of El Paso
Refinery, L.P. Historically, TM&S
Oil Company ("TM&S") owned and operated full service convenience
stores and distributed bulk fuel and lubricants in El Paso, Texas. We oversaw the operations of TM&S prior
to its cash sale in 1994 to Diamond Shamrock for $16 million, provided business
advice to TM&S' operating management, directed TM&S' legal affairs, and
participated in settlement negotiations with creditors. The McManigle Company was responsible for
the banking and investment of the sales proceeds, including making six
distributions of sales proceeds to creditors pursuant to Bankruptcy Court Order
and ordinary course payments aggregating $17 million. Liquidating TM&S' remaining assets in 1995, we supervised and
directed all aspects of the winddown of TM&S' business affairs, including
remediation of a fuel contamination site and supervised the dissolution of the
Company.
Interim
President, Liquidating Trust under Chapter 11 Plan of Reorganization
In this
capacity we were engaged by the liquidating trustee of The JBA Liquidating
Trust to liquidate the nonexempt assets of an individual pursuant to a
confirmed chapter 11 plan of reorganization.
We assumed control of James Resources, Inc. as interim President of
JRI. We assumed control of JRI and its
assets, that included interests in approximately thirty-four producing oil and
gas wells in four states, including offshore Louisiana. The McManigle Company was responsible for
all the business activities of JRI, including: review and monitoring of JRI's
financial affairs; assessment of, and compliance with, production loan
agreements; supervision of the preparation of financial, operating and tax
information; resolution of business disputes; negotiation of the sale of JRI's
assets; and, the winding-up of JRI's business affairs. We employed and directed
the efforts of both legal counsel, accounting professionals, and commissioned a
reserve study to value JRI's oil and gas interests. We were successful in
negotiating a sale of the Company’s producing properties as a component of a
litigation settlement yielding distributable proceeds to the Liquidating Trust.
Interim President
& CEO, Communications Company
The Firm served as President & CEO of a privately
owned communications concern that grew from $600,000 in revenues to a $30
million multi-facility operation during our tenure, creating a nationally
renowned graphics enterprise that served the Fortune 500 market. During this
engagement, we assumed full operational responsibility for manufacturing,
operations, collective bargaining agreements, acquisition of equipment, the
application of technology, information systems infrastructure, strategic
planning, and served as a member of the Board of Directors. Highlights of this
engagement include, designing and building a world class manufacturing facility
that was renowned for its design and efficiency, the adoption of technological
enhancements including the adaptation of beta equipment and techniques; the
successful integration of 5 acquisitions, and serving as chief management
negotiator for collective bargaining agreements covering 9000 industry workers.
Managing Partner,
Commercial Printer
In this engagement in we served
as a Managing Partner for a nationally recognized commercial printer with
responsibility for performing turnarounds at underperforming facilities. The Firm assumed responsibility for a
turnaround at an unprofitable company in Tampa, Fl that had moved into a new
facility. We accomplished the
installation of new equipment, the establishment of operating, administrative
and sales and marketing policies, and the achievement of profitability within
three months – after 14 months of losses.
Interim President & CEO, Canadian Lumber Products Company
As President for a $1 billion
Canadian lumber products company, we successfully concluded the workout of one
of their Divisions. This involved managing through a difficult reorganization
process that included debt restructuring and negotiation with all creditors
through a committee process. We were successful
in avoiding a bankruptcy filing while restructuring and selling unprofitable
divisions. We achieved profitability in
two quarters with the development of new markets, the adaptation of new and
unproven technology, the management and settlement of a major arbitration case
before the NLRB, the negotiation of a landmark collective bargaining agreement,
and the development of a successful exit strategy that resulted in the parent
realizing a $7 million positive swing in their investment in 26 months.
Interim President & COO, NASDAQ Direct Media Company
During this six-month
engagement for publicly traded (NASDAQ) Direct Media Company, we facilitated a
turnaround and developed an exit strategy. We reestablished credibility in the
public and financial markets, effected an operations turnaround, and developed
a merger and acquisition strategy that resulted in the doubling of the size of
the company to make it more attractive to a purchaser. Due to our efforts, the company was
subsequently sold to a British roll-up with investors doubling their
investment.
Interim COO, Health Care Services
The McManigle Company served as an interim COO of a
statewide, multi-site, post-acute network, providing leadership and business
guidance to an organization with three separate entities providing health care
services. During this engagement, we stabilized business operations, identified
and corrected reporting and compliance deficiencies, gained control of revenue
and receivables, developed strategic plans for the disposal, liquidation and
restructured operations of the business and implemented the chosen strategy for
each entity as approved by the Board of Directors.
Chief Restructuring Officer, Textile Industry
The Firm functioned as Chief Restructuring Officer of an
under-performing $20M textile manufacturing company in financial peril to
stabilize operations and regain credibility with its secured lenders. The
company was operating at a significant loss at the inception of the engagement and
the implementation of our business solutions helped support a significant mid
six-figure improvement to the bottom line. During this nine-month engagement,
we assisted the company in developing a business plan that facilitated new
extensions of credit from its existing lender, allowed the company to
legitimately seek “take-out” financing, worked towards a forbearance agreement
with unsecured creditors, and provided for restructured operations. The
management team, a second generation of family owners, was reorganized; the
Controller was replaced with a CFO with relevant financial skills; and a new
enterprise resource planning and financial system was implemented. Meaningful SG&A cost reduction plans
were established to profitability support declining sales volume. We refocused
senior management’s priorities on the sales of the company’s products in its
niche market.
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