Services Home
CONTACT INFO
   
CONSULTING SWEET SPOT
 

Dave Mack / Principal

dmack@pathfindergroupllc.com
(847) 274-7604
J. Paul Ossa / Principal
possa@pathfindergroupllc.com
(214) 557-4398
Jonathan White
whitejonathant@gmail.com
(708) 448-1047
 
 

REPRESENTATIVE CONSULTING
CASE STUDIES

The Wisconsin Cheeseman Small food conglomerate, interim management, assessment, viability analysis, going concern sale, & wind-down.

Senco™ Building products, company advisor, recession downsizing, turnaround, going concern sale & bankruptcy process management.

West Irving Die Casting Automotive assessment during automotive “meltdown”, viability analysis, Assignee/Trustee in a state assignment for the benefit of creditor proceeding, & wind-down.

Victor Plastics Appliance supplier, company advisor, turnaround, going-concern sale & bankruptcy process management.

Metro Financial Services Specialty finance company, interim management, turnaround, capital raising, & going-concern sale.

Arkay Plastics Automotive supplier, company advisor, assessment, viability analysis, going-concern sale, & friendly foreclosure Article 9/UCC sale.

Arnold Defense & Electronics Turnaround, Board of Directors, & sale of business.

Wisconsin Tool & Stamping ESOP, interim management, bankruptcy process management, & going-concern sale.

Quest Industries Automotive aftermarket,company advisor, assessment, viability analysis, going-concern sale, & friendly foreclosure Article 9/UCC sale.

Farm Fresh Catfish Company Food company, company advisor, assessment, viability analysis turnaround, re-finance senior secured debt, creative equity capital raise.

Poter Construction & Development Real estate development & construction, emergency interim management, debt restructuring & wind-down.

CXM, Inc. Foundry, company advisor, hostile union issues, assessment, viability analysis, going-concern sale, & bankruptcy process management.

Carl Weissman & Sons Small conglomerate, family strife, company advisor, turnaround, sale of components as going concerns.

MacCal Management Medium sized Midas franchise, turnaround, debt restructuring and sale as a going concern.

Pate Foods Branded and non-branded food company,Interim management, turnaround, Board of Directors, large acquisition/investments, financing, & joint venture management.


The Wisconsin Cheeseman - (Pathfinder engaged as the Interim CEO & COO to operate businesses and determine viability, a business plan & strategic alternatives) The Wisconsin Cheeseman(“Cheeseman”) was a $25 mil. in revenue company, down from $35 mil. just three years earlier. It operated as four different businesses with common centralized operations. Cheeseman was a catalog and online retailer selling gift baskets, a chocolate confection manufacturer and school fund raising business, a cheese processing operation, and a wholesale gift basket food component distributer. Cheeseman had lost money for four straight years and was highly seasonal. Coming off “The Season” the business had no cash to pay vendors nor had the reserves to fund losses during the slow season and the re-build of seasonal inventory. As well Cheeseman owned a debt laden empty 267,000 sq. ft. manufacturing facility that was illiquid, and operated out of a leased 233,000 sq. ft. facility that was priced substantially above market prices, and which the company used less than 50% of the space. Upon the lender understanding the seasonal results and the upcoming cash requirements, a decision was made to exit the credit. Pathfinder planned and executed a wind-down that required minimal additional purchases. As well, the businesses were self-liquidated and packaged and sold to strategic buyers. The real estate is still trying to be sold . The lender has a fair probability of getting fully paid off due to the successful liquidation/wind-down plan.


SENCO™ - (Engaged as Debtor Financial Advisor to direct cash and cash forecasting, help during for sale process and to help during the bankruptcy process) Senco is a branded manufacturer and distributor of collated screws, nails and staples, as well as, the tools used to process the fasteners, primarily serving primarily the building and contractor industry. Over a two year period Senco’s revenues dropped from $450 mil. to $100 mil. due to the collapse of the building and real estate markets. The company sustained staggering losses as they tried to cut overhead and manage cash. The lenders required new capital and eventually forced a sale process, but the company was left with little to no cash availability to buy finished inventory and raw materials and had no active cash flow forecasting capability. This occurred at a time when there were few if any transactions being closed by senior secured lenders due to the unprecedented disruption in the senior secured markets as a result of the banking crisis. Dave Mack was retained as Debtor Advisor to support the for sale process, develop a baseline cash and borrowing base forecast the company and the bank group could work with, helped make operating and tactical moves in the limited cash environment, and to manage the bankruptcy process. Mack pressed the investment bankers to delay bringing the strategic buying groups into the process, and, instead, made the private equity market the initial effort to sell the business, leaving the strategic players to bid the price up later. This gave the company management, employees and vendor base (both domestic and Chinese) a second chance to retain revenue during the crisis period. To make the cash flow work, the holding company and the extra management were eliminated, and about 25% of production was brought back from China to reduce the cash requirements. The company was sold for $41 mil., and was able to pay back the $26 mil. of senior secured debt and will recover 5% of the $120 mil. of unsecured creditor claims. Liquidation value was estimated at $15-18 mil. The “Big Win” was that 400 jobs were retained and that the domestic and Chinese vendors which kept a viable customer. This was a transaction and financing that occurred during the height of financial crisis!


West Irving Die Casting - (Engaged as Debtor Financial Advisor and later as Assignee/Trustee in an Assignment for the Benefit of Creditors) West Irving was a $75 mil. in annual revenue die caster primarily serving the domestic and transplant OEM automotive with two plants. As the recession began in 2008 and automotive sales dropped to almost nothing, Toyota brought its business in-house eliminating 35% of sales leaving GM as the primary customer supporting the company and leaving the company losing money. As GM’s sales declined losses mounted and Dave Mack was retained to evaluate viability, a cash plan and a consolidation plan for the business. The assessment showed, if the remaining GM business left at the company maintained sales level and the two plants were consolidated, the company would lose money on a monthly basis of at least $300,000 and the consolidation of the plants would cost $1.2 mil., at a minimum. The company and ownership were moving toward a wind-down, when GM communicated that they were consolidating West Irving’s business with another die caster, thus making the decision to wind-down final. With that decision, the lender wanted to avoid a bankruptcy and wanted a cooperative process where ownership would turn the business over to a turnaround firm for liquidation, especially since the greatest possibility was that the liquidation proceeds would be far short of the senior secured bank loan. The prescribed approach to do this was an Assignment for Benefit of Creditors in a Kentucky state court where Mr. Mack would become Assignee/Trustee of the West Irving Liquidation Trust. Mr. Mack negotiated an Access & Accommodation Agreement with GM that paid 100% of the receivables and allowed for the rundown of all inventories. In addition, Accommodation Agreements were negotiated and agreed to with virtually all of the remaining customers assuring a fairly smooth wind-down. The wind-down of operations, liquidation of inventory and collection of receivables took almost three months. The equipment sales and turnover of facilities took another three months in the middle of the worst environment for liquidation since the great depression.


Victor Plastics - (Engaged as Debtor Investment Banker and later as Interim Chief Restructuring Officer) Dave Mack lead a team which was engaged to sell Victor Plastics, a $60 mil plastics injection molder with 400 employees in rural Iowa, that two weeks before, had filed Chapter 11 bankruptcy to execute a liquidation plan. Customers were told to make final orders because the company was to be shut-down within twelve weeks and then be liquidated. The company also unilaterally told customers pricing was immediately being raised 25% across the board and terms would be net 7 days. In addition, employees were told that the company will be wound-down and their jobs would be lost. The company was hemorrhaging cash at a rate of $250,000 per month before professional expenses. The “gauntlet was cast down” for Mack and his investment banking team, who were told to sell the business and have a closing within one month for an amount $1.2 mil. greater than liquidation value. The team was able get marketing material put together and a virtual data-room on-line within one week such that they were able to get into the market very quickly. The investment banking team along with the management team went back to customers and employees and provided hope and continuity based on a quick sale of the business holding together the two important components of a sale. Within a month there were eleven offers for the whole company or pieces of the company. Between additional due diligence, customer discussions, and negotiating the asset purchase agreement another month was expended. The final month was used for bankruptcy notice, a couple of court hearings, an auction, and finally the closing. The end result was the saving of 400 rural Iowa jobs with the perfect acquirer, Riverbend Industries, who had a relationship with an Iowa based OEM that wanted Riverbend in Iowa. If this company were not acquired, the 400 jobs would have been lost for those rural communities. The other offers would have yielded less than the liquidation value expected. Thus, liquidation was very much in the mix as the investment banking team peddled Victor Plastics. Mack and the investment banking team developed a comprehensive plan to close the unprofitable facility in Mississippi, raise customer margins, and get the company back to positive cash flow levels. One week into the bankruptcy, the lenders agreed that a sale was the appropriate path, and Mack was engaged to sell the company as a going concern. Mack and the investment banking team delved into finding the appropriate buyer. Teasers were sent to 175 prospective strategic buyers, private equity, and investment firms. Forty-three signed confidentiality agreements and were granted access to a virtual data room that was up and running only seven days after the engagement began. Eleven prospective acquisition participants made offers. During this process, the investment banking team communicated progress with Victor’s customers, ensuring them that viable offers were on the table and that production would continue uninterrupted. Victor sold for 5.5 times projected EBITDA, a substantial multiple for a plastics company in bankruptcy during the first quarter of 2008. The total engagement was four months. The investment banking portion, from start to sale closing took only three months. This was a story of saving a rural manufacturing business with 400 jobs, and doing the best for creditors. The senior secured lender was paid back in-full. The administrative expenses and post-bankruptcy operating expenses were paid in-full. The junior secured lender had a recovery of $2 mil. of their $9 mil. investment.


Metro Financial Services - (Engaged as Chief Restructuring Officer and as the investment banker to refinance senior secured debt, and raise equity capital and/or sell the business) Metro Financial Services was the seventh largest commercial receivables based financing company in the nation, providing over $600 million of purchases per year with a $60 million receivable portfolio. Following an external fraud which wiped out Metro’s equity, the company’s lenders entered into a forbearance agreement which among other things required a Chief Restructuring Officer to run operations, and to find an infusion of outside capital and to refinance the existing credit facility. In addition, the company required assistance in conducting an objective third party review of its internal underwriting procedures, credit policy procedures and fixed cost structure. David Mack was engaged by the ownership of Metro to achieve these objectives. He implemented an employee reduction program of 25%, a concurrent quality improvement in certain key positions, a portfolio review and clean-up, a complete revamping of the credit process, and a selective client portfolio optimization. The challenges of this assignment included lenders who had differing interests; two lenders with a 100 cent basis and a third with a 72 cent basis, and a management/ownership that did not want the recapitalization and fought the process after the business operated profitably. Once Metro returned to operating profitably (within 90 days), it allowed Mack to secure a $50 mil. three year credit facility and a change of control infusion of $8 mil. of new equity capital. Prior ownership remained in the capacity of executive management with an ongoing share of future profitability. The company is now called Greystone Commercial Services, LP.


Arkay and Plastics - (Engaged as Chief Restructuring Officer and as investment banker to sell the business) Arkay was a tier 2 automotive supplier to Japanese transplant automotive companies, and was a $90 mil. multi-plant manufacturer of precision plastic injection molded parts principally to Delphi and the Japanese transplants. Three years of consolidation left the company unprofitable with a single plant. Abandoned by normal lenders, the company was left with a Japanese tier 1 supplier as its sole senior secured debt holder. This company’s objective was to have Arkay continue to provide timely supply, be repaid their debt, and transition to new ownership and management. In a period when plastic injection molding capacity was being shed by the market, primarily in the form of liquidations, Mack developed a turnaround plan, and marketed and closed an UCC article 9 sale and auction within 60 days of commencing the sale process. Arkay was sold for the value of the senior secured debt, which was about $1 mil. more than liquidation value. During the sale process he contacted approximately 250 participants, sent-out 75 for sale memorandums, had 10 visits and received four offers. The business was sold to a metals and plastics manufacturing consolidator that valued the customer relationships. Utilizing new management and the changes that Mack instituted, the company turned profitable within 60 days after closing without any new business being added. The company is now called MW Monroe Plastics.


Arnold Defense & Electronics - (Chairman of the Board and CEO, turnaround advisor and co-investment banker to sell business) Arnold Defense and Electronics is a defense contactor that designs and manufactures rocket launchers. A “new age” lender backed an operator to acquire Arnold Defense & Electronics from a large conglomerate. The operator failed to perform, Arnold was substantially unprofitable, and the lender was forced to settle with the operator and take over the operation as both owner and lender. Mack was engaged as a Board Member and CEO of the business. It was hemorrhaging cash. Mack provided the needed leadership to stabilize the business and nurse the company back to health and profitability. Though profitable, the company was not strategically positioned to be a stand-alone company long-term. This was a big negative valuation issue in the sale process. Once the company returned to profitability for six months, the Mack worked with buying groups and found a private equity firm which wanted the business to diversify their core business, but valued Arnold fully for its market position and contracts. This was the leverage and interest needed to create a competitive valuation process. Arnold Defense & Electronics was sold and is currently part of a defense contractor build-up. Within two years, Arnold went from being an “almost” liquidation to a capital gain of $4.5 mil., as well as a fully paid senior secured loan.


Wisconsin Tool & Stamping - (Chief Restructuring Officer and Co-investment banker) Wisconsin Tool and Stamping is a sixty-year-old company providing high quality metal stampings to some of the world’s leading manufacturing companies. Following the sale of the company to an ESOP, it experienced deteriorating sales and profitability due to management issues, changes in its competitive environment, general economic conditions and its ability to maintain margins. Following an aborted attempt to sell the business and facing continued financial distress, the company filed Chapter 11. Mack was engaged by Wisconsin Tool to assess the ability to restructure the business under a plan of reorganization. Mack assisted Wisconsin Tool in successfully returning to profitability and operating with positive cash flow while strategic alternatives were explored. As a result, the Company's senior lender experienced an intermediate pay down which allowed time to develop alternatives. Working with Wisconsin Tool's other advisors and the creditors, Mack generated potential buyers; and, under a Section 363 auction, the company was sold. Scheduled proceeds were sufficient to repay the senior lender, repay 100% of the unsecured creditors and provide some return to the ESOP. In addition, the buyer moved work into the manufacturing facilities which allowed for the retention of a majority of the work force.


Quest Industries - (Turnaround advisor and investment banker to sell or recapitalize business) Quest Industries was a $35 mil. automotive aftermarket product supplier that primarily sold through big box automotive store chains. Quest developed unique and proprietary product domestically, manufactured it in China, and warehoused and distributed domestically. Quest introduced a new and original product line that failed and cost the company $9 mil. in cash losses. The failed product introduction destabilized the relationship with Quest’s major retail customer to the point of the customer becoming a predator and grabbed value through returns and credits This resulted in a liquidity crisis and destabilized their lending relationship. Mack was engaged by ownership and the Board of Directors to turnaround the business and to develop strategic alternatives; either sell the business or recapitalize it. In preparation for sale, Mack restructured operations and management, and implemented an inventory reduction program.. Mack then developed a competition among two buyers, to invest and acquire control of the business thus ensuring an optimal outcome. The sale was competed via a UCC article 9 sale and an equity recapitalization.


Farm Fresh Catfish Company - (Turnaround advisor and investment banker to sell or recapitalize business and refinance the senior secured debt) Farm Fresh Catfish Company was a leading processor of catfish nationally with $70 mil. of annual sales. The company was formed by a group of catfish farmers and financial investors to purchase a division of Hormel. A subsequent buy-out of the financial investors and an unsuccessful outsourcing of company management to Farmland Industries in anticipation of a merger which did not occur, left the company without management, deeply in debt and unprofitable. Mack was engaged as turnaround advisor to the Board of Directors and as investment banker to develop strategic alternatives. Mack successfully rebuilt management and restructured operations, and developed a creative equity financing approach by selling catfish delivery rights to independent farmers who wanted guaranteed processing capacity. This approach generated $5.6 mil. of new equity capital. Following this equity infusion, there was a refinancing of the senior secured debt via $15 mil. of bonds issued by the State of Arkansas.


Poter Construction & Development - (Interim management and restructuring advisor)Poter Construction and Development Company serves the private and public sectors developing and building multi-family residential and commercial projects in the Chicago area. Projects ranged in size from $5 to $30 mil.. Mack was engaged as the interim manager and restructuring consultant following the untimely death of its sole owner, founder and visionary. There were ten projects in development and construction, all with different lenders and different partners. The owner’s death had put the entire company in a holding pattern and created defaults in all its construction loan agreements. Mack’s initial assessment uncovered a material capital shortfall. He developed a plan to downsize overhead, restart the projects, renegotiate various loan agreements and restructure developer equity positions and partnerships. This strategy optimized the outcome for all lending and ownership constituencies and allowed for the continuation of all existing projects .


CXM, Inc. - (Turnaround consultant and investment banker)Chicago Extruded Metals Company (CXM) is a leading manufacturer and supplier of brass extruded shapes and rods that services a wide variety of markets and customers throughout North America, with sales of $40 million. Following an unsuccessful attempt by management to refocus operations, Mack was engaged at the request of CXM's senior lenders to maximize the value of the business through a restructuring and to develop strategic alternatives. CXM’s core foundry operations were operated with a very unproductive, high cost and uncooperative union workforce, with the value-added processes in two non-union facilities that were 200%+ more productive than the key unionized operation. Mack assumed the role of Chief Restructuring Officer and financial advisor. He operated the business within the constraints of the Company's available liquidity, shared detailed operating information with customers to preserve confidence, and maintained the continuity of shipments without disruption; and so insured the continuation of the going concern. This was especially a concern to certain strategic customers, notably Delphi, Dana and Eaton, that the Company supplied on a sole-source basis. Mack worked closely with these groups, and with Delphi's financial advisor, on production and shipment schedules, which were met throughout the pre-petition and post-petition process. He also coordinated purchases of inventory and developed tolling arrangements to insure CXM’s ability to maintain production during periods of diminished liquidity. Mack’s firm prepared confidential information, contacted potential transaction participants within the industry and financial buyers, received and evaluated indications of interest, and negotiated a sale of the business with a “stalking horse” buyer. The “stalking horse” buyer required a Chapter 11 bankruptcy filing, and was moving to replace the unionized workers as part of the process. This motivated the unionized workers to negotiate with another buyer who eventually won the auction at the bankruptcy 363 sale. As a result of the sale, senior lenders received a full recovery and the business continued to operate, profitably, under new owners in a consolidated and restructured operation housed in one unionized plant.


Carl Weissman & Sons - (Turnaround advisor and investment banker to sell or recapitalize business) Carl Weissman & Sons, Inc. (“CWS”) was a $50 mil. in revenue hardware distribution, steel service center, steel scrap dealer and government contractor serving six major cities in the rural far west. This family business had not been profitable for five years, and had not had a Board of Directors meeting during this period. The two sides of the family that owned CWS were not collaborating at all or having formal or informal meetings due to mistrust and historical family quarrels. Mack completed a business assessment and worked closely with the two family factions to sell the core business to non-family management. The result was a $ 3 mil. equity recapitalization. The senior secured debt was still not repaid, but Mack sold two remaining and profitable subsidiaries, and uncovered and arranged to have sold an unusual asset, a famous Charles Russell painting, which was off-site and almost forgotten. Proceeds from the sale satisfied the amount due the senior secured lender.


MacCal Management - (Chief Restructuring Officer and investment banker to sell or recapitalize business) MacCal Management was a mid-sized Midas franchisee that was owned and managed by a former Franchisee of the Year . However, ownership had not addressed multi year operating and business issues of the stores, and had limited his personal alternatives by having an emotional episode at a meeting in front of the CEO of Midas and the senior secured lender. Mack was retained to operate the business and to sell it to create the best outcome for ownership. Ownership had substantial personal wealth in jeopardy due to the personal guarantees to both Midas and the senior secured lender. Even though Mack was in the CRO role, ownership was very difficult to deal with and became suicidal requiring medical intervention. Ultimately, MacCal was sold to an investor group with experience within a related automotive sector for a value which repaid in full the $17 mil. in senior secured debt and satisfied Midas enough such that they did not to collect on the guarantees. The former owner recovered his health within four months of the transaction.


Pate Foods - (Turnaround consulting, interim management, board of directors and investment banking) Pate Foods Corporation was originally a $30 mil. in sales multi-plant snack food and cookie manufacturing company that was a restart by an entrepreneur who acquired the businesses in a liquidation. Mack was initially hired for and closed a $15 mil. initial senior secured debt financing of the unprofitable operation, based on a business plan, some appraisals and the credit support of the entrepreneur. As a second effort, Mack was retained to improve sales and in-plant operations. The three plant operation was consolidated into a two plant operation. Shop-floor controls and metrics were implemented on the factory floor, and management personnel changes including a new president were made. Besides changing and adding sales personnel, a strategy of brand and co-pack acquisition was implemented. This brought the financial performance of Pate to almost break-even. Working with Mack and a senior secured lender, Pate’s ownership acquired a $20 mil. in sales sister company which shared back room and sales forces with Pate. Finally, Mack sourced a branded cookie acquisition with a management team and cookies that needed to be co-packed, Salerno Cookie. Salerno was a $55 mil. regional branded cookie company with store-door-delivery. Mack married the buying group’s need for equity capital with pate Food’s need for cookie baking volume. The buying group jettisoned manufacturing for the co-packing model and placed all SKUs with various co-packers, a third of which was with Pate Foods. This focused the Salerno business around branding and the store-door-delivery business, with refreshed packaging and promotion. The last year Salerno manufactured and was a stand-alone company, there was a $6.5 mil. loss which when restructured and repositioned turned into a $500,000 profit. Mack provided consulting for Pate Foods and was a member of the Board of Directors. Two years later the operation sold for 3.5X original investment to Delicious Brands, which quickly sold to Parmalat USA. As part of the transaction Pate received $12 mil. co-pack cookie production contract, which resulted in Pate achieving an EBITDA of $4.25 mil. per year.

top



   
$10 to $200 million in sales
Unprofitable or trending towards unprofitability
Capital shortages
Pressure from lenders
Cash poor
Creditor build-up
Industry troubles
Loss of sales
Management succession issues
Technical default with bank
Unmanageable debt load
Inability to refinance
Need for exit
Special situations
Survival & growth plans
         

Chicago Office: 2015 Orrington Avenue ● Evanston, IL 60201  |  Dallas Office: 1211 Cambridge Dr. ● Carrollton, TX 75007
//    Copyright © 2011 Pathfinder Group, LLC.////

Many of you know this, but for those who don't know Rolex's little ritual we will explain. First of all, as far as we know, Rolex is the only brand to debut their new watches in this way. Rolex literally unveils the new watches. There are windows around the entire Rolex replica watches booth, and in the display case windows are many existing Rolex replica watches as well as the new ones. The new ones have a little "new" label next to them and are covered with a little cloth hood. When the time is right (usually in the early afternoon on the press-only day of Basel) Rolex replica watches sale opens up the case and pulls off the hoods-pretty much all at the same time-to reveal the new replica watches. After that it is a de facto point of conversation to discuss "the new Rolex watches" and everyone asks each other whether the new Rolex replica watches are enough, or properly new, or interesting.