High-End Kitchen Appliance Distributor

Company Overview

High-End Kitchen Appliance Distributor - The Company was a $60+ million master-distributor of high-end kitchen and laundry appliances to retailers, contractors, and other distributors in North America.  The Company maintained inventory in three states and also maintained a service network to address warranty issues.
Engagement Overview
•  The Company’s main product provider (85% of sales) chose to begin selling direct to retailers.  This decision coincided with the down-turn in residential construction, causing the Company to incur significant losses as it attempted to ramp-up sales of new manufacturing lines.

•  FDP was initially engaged to perform an operational review of management’s business plan and assess its strategic alternatives:
•  Performed an analysis of the Company’s distribution channels and divisional profitability
•  Initiated cost reductions while alternatives were explored
•  After evaluating liquidity issues, the conclusion was to wind-down operations due to required investment in start-up of new lines and the lack of support from owners and lenders

•  Working with Board and lenders, FDP was selected as the Chief Liquidation Officer for the Company after management were asked to resign.
•  Conducted an out-of-court wind-down of the business
•  Retained and motivated desired employees to assist with liquidation efforts
•  Selected inventory liquidator and AR collections firm after employee led efforts ceased
•  Negotiated multiple warehouse arrangements in various states as facilities were vacated
•  Dealt with various issues related to Dept. of  Labor, employee retirement plans, and state taxing authorities
•  Performed search for fraudulent transactions related to  owner and manager payments and transactions, and inventory transactions with customers and vendors

•  Completed final accounting for all three operating entities from incomplete information in order to prepare tax returns.
Results
•  Secured assets and stepped in as operating manager upon resignation of entire management team.

•  Identified consignment inventory arrangements, recorded as actual sales, and negotiated with customers to maximize inventory and receivable realization.

•  Maximized recovery by the estate by finding a buyer for unknown and unsupported line of inventory after efforts by liquidation consultant proved unsuccessful.

•  Negotiated settlement between lender and stockholders for payment on outstanding stockholder receivable due the Company.