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Case Study: Cheese Manufacturer
Wind-down & Liquidation Management
Company: $275 million publicly-traded manufacturer and distributor of premium Italian cheeses. The Company's block, grated and
shredded cheese products were manufactured in New Jersey, New York, Idaho, and California and sold to retail customers and food
service distributors who reached restaurants, hotels, caterers, and food ingredient manufacturers.
Situation / Tasks Performed:
Almost immediately after a secondary public offering, the Company's two top financial officers abruptly resigned within 24 hours
of each other. Within days, the SEC halted trading in the Company's stock and federal and state authorities raided Company headquarters
and seized all books, records and computers. A class-action shareholder lawsuit was also filed. The Company's Bank Group froze its line
of credit, and the Company ultimately filed bankruptcy. TRG was hired by the Ch. 7 Trustee as special operational consultant to oversee
the wind-down of operations and the liquidation of assets. This included the collection of accounts receivable, the sale of remaining
inventory as well as the four manufacturing facilities. TRG took control of the day-to-day operations on behalf of the Trustee. TRG
developed a detailed cash flow budget which involved identifying necessary cash disbursements and identifying key employees to assist
in the process. TRG was responsible for all employee issues, including payroll, 401k, insurance and benefits, as well as security and
insurance related matters. TRG also assisted the Trustee in the claims review process and in the preparation of
schedules and the statement of financial affairs.
Results:
Approximately 82% of the beginning book value of accounts receivable have been recovered to-date. Three of the four facilities, with the
fourth pending, were sold as turn-key packages to cheese producers, allowing the Trustee to maximize recovery well beyond that which would
have resulted if the facilities were sold on a piece-meal basis to liquidators.
TRG assisted the Trustee in the recovery of tax refunds in excess of $10 million. TRG initiated insurance audits which to date have yielded
$50K in returned premiums.
Nature of Assignment:
Primary: Wind-down & Liquidation Management
Industry: Produce
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