Company in Crisis Benefitted from Leadership, Teamwork and Communications

How Platinum saved approximately 200 jobs during a successful sale process

Situation

A technology services firm in bankruptcy was facing the potential risk of funds running out and business shutting down before it could be sold. Platinum Group was called in to provide interim management while guiding the company through the sale process.

Challenges

  • The company’s top-down culture resulted in rumors that could harm the sale process.
  • Its accounting department was inadequate to the business.
  • Important creditors allied with losing bidders asserted their own ideas regarding the proper disposition of the company’s assets.
  • Insufficient time and resources were available for prospective bidders to perform certain basic due diligence tasks, including visiting the company.

Response

Platinum quickly filled the role of operating manager and provided necessary leadership as the company went through crisis. A strategic decision was made to continue to employ the owner /managers, but to end their contact with the business and employees. Good communications and credibility with employees was established. Platinum worked with accountants to produce needed financial reports; then identified and worked closely with a DIP lender to provide interim financing until the sale was concluded. In addition, Platinum communicated directly with the company’s customers, vendors, and creditors.

Platinum managed the sale process by generating a list of approximately 40 interested, prospective buyers. A virtual, online data room was created to share identical information with all bidders. In lieu of one-on-one meetings, Platinum conducted a large-audience conference call to enable bidders to hear the management team’s responses to their submitted questions. Six parties submitted bids and a sale of the business assets was successfully concluded.

Results

The interim management and sale process was completed in three months. The estate gained significant benefits through the resulting sale of the assets of the business for $8 million. (An earlier, independent estimate of value suggested that $1.5 to $2.0 million was likely to be realized.) Today, about 80% of the former employees are still employed by the buyers.

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