Selected Engagements
ACA Management Group has extensive experience in a broad range of industries and in virtually every aspect of the turnaround process from operational improvement and cost reductions to balance sheet restructurings to successful re-organizations via Chapter 11 bankruptcy proceedings.  The selected engagements highlighted below provide a snapshot of the breadth and depth of ACA's experience.
An intra-state trucking company, whose revenue had peaked at $100 million a few years earlier with a fleet of over one thousand vehicles, was rapidly heading toward a Chapter 11 filing. The primary objective of the filing was to protect the assets of the owners which had been pledged to secure the company's debt.
Action & Results
  • On-site financial assessment quickly revealed that the company was in a serious liquidity crisis where the company would be soon faced with the choice of making payroll or purchasing fuel. Doing one or the other would immediate shut down the business.
  • Prepared a 4 week cash flow indicating that the owners would need to invest $1.0 million in new cash just to survive while Chapter 11 petition was prepared.
  • Detailed analysis revealed that the company's cash flow had deteriorated to the point where the operations could not be sustained through a bankruptcy re-organization process.
  • Completed profitability analysis of the business on a segment by segment basis and determined that the assumptions regarding improvements in cash flow resulting from growing the company were flawed and demonstrated that additional cash investment was required to return the business to profitability.
  • With a clear understanding of the costs, rigor, and risks of the Chapter 11 process, the owners are considering whether to invest the additional capital that is required to orchestrate a meaningful re-organization of the company.
Patrick Farms Partnership
A 5,000 acre grower/packer/shipper of greens and other produce crops.  Engaged by the principals at a time when accounts were overdrawn on a regular basis and the principals were concerned about the farm's ability to continue its harvest.  The farm suffered significant losses over the past several years and is highly leveraged.
Actions & Results
  • Ceased all disbursements for a number of days to allow bank overdrafts to be repaid and initiated strict controls over cash disbursements.
  • Developed and implemented a detailed cash budget to micro-manage the farm's cash on a daily basis.
  • Revised the crop plan to reduce acreage farmed and allow the farm to concentrate on its core crops.
  • Terminated sales force and outsourced the sales and marketing function to a national produce marketing firm.
  • Hired a CFO.
  • Reduced permanent employee headcount.
  • Initiated discussions with all secured creditors and key unsecured creditors to secure their support of the farm's reorganization.
  • Planned and executed the farm's Chapter 11 filing.
  • The farm is currently continuing its operations in Chapter 11.
Global Consumer Products
A global manufacturer and marketer of branded consumer products had been overleveraged and management was anticipating a Chapter 11 bankruptcy filing because the company was unable to make principal and interest payments on its debt. A consortium of banks with a $250 million ABL facility in place was uncomfortable with the company's projections and concerned about the company's ability to survive as they considered providing DIP financing.

ACA Actions & Results

  • Developed a financial model to clearly identify the company's cash requirements for the banks.  The process revealed that an additional $50 million in capital was required for the company's restructuring plan to be successfully implemented.  Additional capital was arranged and the lenders provided a $235 million DIP facility.
  • Implemented and monitored weekly budget analysis and updating processes along with variance analysis and reporting.  This activity allowed the company to move through the bankruptcy process avoiding any material budget deviations.
  • Performed analysis related to adequate protection issues for senior lenders and evaluated the company's exit financing requirements.
  • This company was successfully restructured and able to exit the Chapter 11 process within  nine months of filing.
Large Restaurant Franchisee
The company was the largest franchisee within a nationally recognized quick service restaurant concept.  A consortium of banks had provided the franchisee with over $100 million in term loan facilities and a revolving line of credit.  The company was operating under a forbearance agreement that was close to expiration.  The banks were seeking clarity regarding their available options.

ACA Actions & Results

  • Completed a liquidation analysis that indicated the banks were likely facing a collective $70 million loss in the event the company was liquidated.
  • Conducted a thorough analysis and review of the company's cash budgeting process to determine the reliability of the forecast that had been provided to the banks.   The evaluation identified critical aspects of the process that needed to be strengthened.
  • Provided feedback related to the proposed restructuring of the company's balance sheet and tested the assumptions underlying the five year projections.
  • Reviewed and adjusted projected proceeds from the sale of various locations to reflect a more realistic likely outcome.
  • Based upon their confidence in the budget process and the projections, the banks agreed to extend the forbearance agreement and later amended the loan agreements to accommodate the company's reduced cash flows.
Chapter 11 Bankruptcy
ACA's consultants have been involved in all aspects of the bankruptcy process including successful Chapter 11 reorganizations, 363 asset sales, orderly wind downs, and liquidations.  This extensive involvement working on behalf of lenders and debtor companies, allows the firm to provide a wealth of critical insight along with substantial professional technical expertise in the Chapter 11 process.
The firm has developed a specialty practice providing consulting services to borrowers and lenders in the various aspects of the agriculture industry. Diedrich Von Soosten's expertise in this area was recognized by the Turnaround Management Association's (TMA) Atlanta Chapter in 2003 when his work with a client won Turnaround of the Year.
Iconic Furniture Brand
The operations of a 70 year old furniture brand had been merged with a supplier of standard casework furnishings for hotel and healthcare industries. The lack of compatibility in terms of manufacturing and marketing processes further exacerbated the liquidity issues the companies faced. The company's funding source was steadily changing reserve requirements and reducing availability under the company's asset based loan facility.
ACA Actions & Results
  • Development of detailed cash budgets to understand sources, uses, and timing of cash flows. Micro management of cash to assure disbursements were limited to critical items.
  • Clearly identified the legal issues associated with co-mingling of funds and the potential liabilities faced by the owners.
  • Advised management on critical matters to avoid issues related to deepening insolvency issues.
  • Prepared company for Chapter 11 filing and a 363 sales process that would allow the owners to re-acquire the brands, which had higher potential value given a customer list that included Costco and Macy's among other significant national retailers.
Branded Snack Food Company
A well established and nationally known brand of snacks foods -- whose customer lists included Kroger, Wal-Mart, and Dollar General among others -- was forced into Chapter 11 as a result of poor management oversight amid allegations of accounting irregularities.   The company was forced to close it manufacturing plant and headquarters facility and terminate all employees without notice.

 ACA Actions and Results

  • Reviewed DIP budget for approval by the bank.
  • Directed the timely completion of the Statement of Financial Affairs and Schedules for the company to provide accurate information to all parties in the Chapter 11 process.
  • Managed the accounts receivable collection process and derived over $10 million in cash from a book of highly questionable receivables.  Negotiated settlements and terms with key accounts to generate badly needed cash flow.  The success of this activity funded the company's operations during the Chapter 11 proceedings.
  • The company's brands were sold to a strategic buyer and the bank was repaid in full.


Furniture Import and Wholesale
The company was severely impacted by the bursting of the housing bubble and saw its annual revenues decrease by 40% in a relatively short time period.  It began experiencing operating losses and the company's lender expressed concerns about renewing its credit line. The shareholders were looking for guidance in dealing with these issues and turned to outside professional for advice.
Action & Results
  • Completed analysis of the situation indicating that with sales declining there was far too much inventory on hand, on order, and in transit from its Asian suppliers. Expenses were too high for the level of sales that were projected for the year.
  • Prepared detailed cash forecast that was integrated with schedules showing all critical aspects of the business along with projected loan balances and borrowing availability.
  • Developed a detailed action plan that included targets for expense reductions, incentive programs for the sales rep organization, and inventory reductions to bring the operation back into balance with sales levels.
  • The company's lender became comfortable with the financial projections and plan for restoring positive cash flow along with their ability to monitor the situation.  The company returned to profitability and the lender renewed the loan.
Engaged by the company's secured lender to perform a situation analysis related to a borrower in the business of tools distribution to the construction industry.  The borrower had been experiencing losses for several years and the lender was concerned with its collateral position.  The lender was seeking advice regarding the optimal way to manage the relationship to avoid a potential loss.
Action & Results
  • Prepared a liquidation analysis that showed that if the borrower were liquidated the lender would suffer a significant loss.
  • Prepared a pro forma profit and loss which identified the key drivers of the company's losses which were entirely attributable to very large increases in specific line item expenses.
  • Advised the lender to forebear on the loan subject to the borrower preparing a cash budget with appropriate expense reductions.  The borrower refused to engage outside help in developing and implementing a cost reduction plan.
  • Advised the lender to carefully monitor collateral and to insist that any collateral reductions be accompanied by appropriate reductions in loan balances.
  • Lender agreed to term out the loan. However, the borrower continued to struggle as it was unable to develop and implement an action plan on its own.
Balance Sheet Restructuring
This privately held business with $20 million in annual revenue was experiencing significant losses almost immediately following an investment by a private equity firm that was made to fund expansion.   The private equity fund was uncomfortable with providing additional capital that would stabilize the business because it did not control the voting stock in the company.

ACA Actions & Results
  • Executed a forbearance agreement with the company's bank allowing time for the sale of real estate to reduce the outstanding debt.  The real estate was leased back by the company with no interruption of operations.
  • Negotiated with holders of subordinated loans to convert the debt to preferred stock.
  • Within 12 months the company's debt was reduced from $4.4 million down to $200,000.  The restructuring of the balance sheet reduced principal and interest, improved profitability, and increased cash flow.
  • The new balance sheet and cash flow improvement stabilized the business and positioned it for growth.  This facilitated an additional investment by the private equity investors that resulted in a control position.
Major Restaurant Supplier
Interim CEO of a major supplier of printed paper products to the largest competitors in the Quick Service Restaurant (QSR) industry. Installed new accounting and cash management systems along with sales management programs. Re-established relationships with critical customers. Company was sold profitably by investors.
Personal Services & Insurance
Evaluated market position and strategy of a slow growth multi-location business with a substantial investment in a non-core, tangentially related business. As recommended, non-essential operation was sold to a strategic buyer to provide dividend to investors and capital for expansion of the core business.
Entertainment Distribution
Developed a database system for a home entertainment distribution company that was a supplier to a retailer with 8,000 locations in the U.S. System greatly improved coordination between the distributor, field merchandising teams and the retailer and provided timely inventory data and accurate shrink data for use by management.
Multi-state Restaurant Company
Stabilized the operations of a multi-state QSR company. Exited unprofitable markets and closed negative ebitda locations. Reduced G&A staff and relocated headquarters to smaller facility. Negotiated settlements and new terms with suppliers to conserve cash. Returned company to profitability following three consecutive years of losses.
Performed evaluation of management and assessed the viability of a multi-site restaurant company. Determined that management did not have skills required to grow concept and justify further cash infusions by the investors. Analysis and recommendations were accepted by investors.
Multi-State Retail Business
Revitalized operations of a 25 years old company by focusing resources on the growth of its retail division. Completed strategic acquisition that increased revenue and ebitda by 50%. Further enhanced performance with implementation of new cash controls, standard operational metrics and incentive programs.
Entertainment Software Retail
Led acquisition of a non-core business from a major media company. Due diligence uncovered that investor agreed to overpay by $10 million for the operation. As a result, the transaction was renegotiated to reflect an appropriate valuation. Investor ultimately exited with a very attractive return.
"The first job of any leader is to define reality, and you can't do that if you are obscure...."--Harvey Golub
"Leaders must very quickly accept the difference between what they assumed the world would be like and the reality that they now actually face."--Al Carter
"Crises offer rare opportunities to make major changes in an organization because they lessen the resistance that exists in good times." --William George
"How many legs does a dog have if you call the tail a leg?  Four.  Calling a tail a leg doesn't make it a leg."--Abraham Lincoln
"Every time I close the door on reality it comes in through the windows."--Jennifer Yane
"An error does not become truth... nor does truth become error because nobody sees it."--Mahatma Gandhi
"Everyone is entitled to his own opinion, but not his own facts...." --Daniel Patrick Moynihan