distributor of high-end kitchen appliances

$60M Revenue

Company Overview

The Company was a $60+ million distributor of high-end kitchen and laundry appliances to retailers in North America.
In addition, the Company operated as a home appliance distributor to the contracting and buildings trade market, and an importer and master distributor of kitchen and laundry appliances to 8 North American distributors.
The Company warranted certain product lines and 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 downturn 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; and
- -Evaluated liquidity issues, concluding that a wind-down of operations was required due to the lack of the required investment in start-up of new lines and the lack of support from owners and lenders.
Working with the Board and lenders, FDP was selected as the Chief Liquidation Officer for the Company after management was asked to resign.
Fort Dearborn 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; and
- -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

FDP secured assets and stepped in as operating manager upon resignation of the entire management team.
Fort Dearborn identified consignment inventory arrangements recorded as actual sales and negotiated with customers to maximize inventory and receivables realization.
FDP maximized recovery to the estate by finding a buyer for an unknown and unsupported line of inventory, after efforts by the liquidation consultant proved unsuccessful.
Fort Dearborn negotiated the settlement between the lender and stockholders for payment on outstanding stockholder receivables due the Company.

distributor of high-end kitchen appliances

$60M Revenue

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