Businesses turn to McManigle to smooth transitions from crisis to calm.
The decisions to change Senior Leadership (CEO, President, and Managing Director) are never easy, but the equally more perilous question is: To whom do we turn over the reins…and under what circumstances? McManigle has proven the ability to step into highly-charged and perilous business situations with strength, integrity and clarity of purpose that provides immediate confidence to an organizations managers, employees, customers, lenders and vendors.
McManigle brings a “let’s get back to business and succeed” viewpoint that critically re-focuses efforts on the daily demands of managing, while improving, a business until such time as its permanent new leader is identified, vetted and engaged.
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.
