Navigating a Distressed Company Sale

April 12th, 2010

Navigating a distressed company sale?
Don’t go it alone; have an experienced advisor on your side

The sale of a distressed company adds another layer of difficulty to what is often an already complex transaction. To make matters worse, it is critical to act swiftly in order to preserve the value of the assets, especially personnel. Having a qualified advisor on your side to work through the process can ensure that the right transaction and deal terms can be consummated.

Challenge
Anthony Frisicaro, a long-time veteran of the accounts receivable management industry (ARM), sold his collection agency, Account Solutions Group, in 2004. When his non-compete expired, he wanted to get back into the business and start a new agency in his community. As a single investor, he was looking for an existing agency to build from.

Solution
Kaulkin Ginsberg has long-term, solid relationships with owners and operators in the ARM industry. We stay informed about their interests and we are able to get quick results when we call on behalf of our clients. In this case, within a matter of weeks our industry reach enabled us to identify Elite Recovery Services, a bankcard/credit agency/debt buyer located in Buffalo, as a favorable acquisition target for Mr. Frisicaro.

Elite Recovery fit Mr. Frisicaro’s requirements of size and location, and he was also familiar with the management team already in place. However, the firm had fallen on hard times and was forced into bankruptcy.

Because the company was in bankruptcy proceedings, we needed to work quickly with the bank, lawyers, and other stakeholders to facilitate the acquisition of the company’s assets and a retain staff. Our experience with this type of transaction enabled us to work through difficult issues such as determining the value of Elite’s fixed assets and initiating the state licensing process for the new entity, and we put Mr. Frisicaro in a position to operate this business under a new corporate name that was clear of any liabilities.

Result
Through our efforts, Mr. Frisicaro’s new agency, Greystone Alliance, LLC., successfully purchased the assets of Elite Recovery Services and took over the facility lease in February 2009. Mr. Frisicaro got the best of all possible worlds; a turn-key operation to start from with an experienced staff at favorable terms.

What can we do for you?

Contact Mike Ginsberg,  at 240-499-3800 or by email to discuss your interests in confidence.

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