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Collection of Accounts Receivable

This $12 million machine tool shop had filed for bankruptcy without prior warning and several weeks of payroll were in arrears. The company's information systems and records were in disarray and no employees were available to assist in the collection of the outstanding receivables.

We gathered various historical documents and reconstructed the account receivables aging and subsequent collections. We coordinated the collection efforts through phone contact, providing documentation to the customer as required, negotiating outstanding warranty and RMA issues, and verification of payments made. This resulted in collection of $300 thousand of outstanding receivables, sixty percent of what was on the books. For the accounts still uncollected we organized the files and forwarded them to counsel for further action.

Collateral and Financial Performance Confrmation

The $3 million manufacturer of credit and smart cards had overextended itself through purchasing new equipment just as its revenue started declining. Inaccuracies in its financial reporting left the lender uneasy. We were asked to perform an onsite review of its balance sheet accounts to impute its financial performance and to analyze its collateral.

Upon completion of these analyses we set up a program for continued monitoring of its collateral through daily reporting.

Operational Review and Collateral Analysis

The $17 million foundry had been experiencing production shutdowns since attempting to bring a new furnace online the previous year. This led to continued losses and a severe cash shortage. The company had a variety of problems with unpaid benefits, outstanding utility bills in excess of $600 thousand, and was under a restraining order from OSHA for corrective actions.

The company was asking for an overadvance from its lender as it sought an equity infusion or a refinancing of its debt.

We were asked to review the operations of the company and its cash flow projections to determine the company's actual needs. Our analysis was performed on site and included the confirmation of the company's collateral reports. Based upon our analysis limited additional advances were negotiated and we updated our analysis with weekly visits.

As various proposals were presented to the debtor we provided a detailed feasibility analysis to the lender. We completed our services when the company successfully obtained new financing.

 

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