Barneys New York
Barneys, a well-known upscale retail clothing company with substantial real estate holdings in major U.S. cities, experienced questionable financial practices, resulting in Brincko Group being brought in as interim President and COO. We conducted a comprehensive review of the company’s business, including a rigorous review and assessment of existing financial systems, reporting and practices, and senior management. We recruited and developed a new senior management team and, during the term of our engagement, were able to restore credibility with vendors and the financial community, negotiate new financing, and accomplish the desired restructuring before putting the company up for sale. Five consultants worked for a year-and-a-half on this engagement, with the company ultimately exiting bankruptcy with new ownership.
CalComp Technology, Inc. (a publicly traded subsidiary of Lockheed Martin)
Serving as interim CEO, we were asked to study the company’s businesses in the U.K., Europe, North America, and Asia, conduct feasibility studies to determine the best course of action to maximize asset values, and design and implement programs to divest assets and sell or wind down businesses. The value and potential of the businesses, both as ongoing entities and wind downs, were assessed under a number of scenarios against targets set by the parent company. Six consultants worked to sell and wind down the various businesses and related real estate, which were valued in excess of $250 million, with the result being a significant return in excess of the targets originally set by the company.
Once the third-largest trucking company in the U.S., Consolidated Freightways filed a liquidating Chapter 11 in September 2002. At the time, the company had approximately 110 facilities throughout the U.S., Canada, and Mexico. As interim CEO, one of our objectives was to sell excess trucking terminals, warehouse facilities, and offices, as well as the Canadian and Mexican trucking operations. We undertook a rigorous analysis of approximately $500 million in assets, analyzed and structured various business scenarios under which the assets might be attractive to buyers, assessed various bids, and conducted viability analysis with respect to prospective buyers. Seven consultants worked just under two years to complete the wind down of this company.
EMAK Worldwide, Inc.
EMAK Worldwide, a major advertising/marketing company with a roster of clients that includes Procter & Gamble, Disney, Kraft, Kohl’s, Hilton, Corona Beer, Constellation, and Subway, was embroiled in many major lawsuits when it filed for Chapter 11 in August 2010. The Brincko Group were hired as financial and claims consultants and Mr. Brincko was appointed as an independent director for EMAK, one of three serving on the Board, and sole member of its Special Litigation Committee. He was tasked with resolving the company’s numerous lawsuits in California and Delaware as well as all other litigation and claims objections. We successfully negotiated and settled the lawsuits and claims objections and assisted the company in its turnaround strategy as well as negotiating a plan of reorganization with a plan sponsor, in less than one year. The company emerged from bankruptcy on June 30, 2011 as a successful going concern.
Franchise Pictures, LLC
In the late 1990’s and early 2000’s, Franchise Pictures was an independent motion picture production and distribution company that produced such films as The Boondock Saints, The Whole Nine Yards, The Whole Ten Yards, The Big Kahuna, 3000 Miles to Graceland, Driven, and many others. In 2004, Intertainment AG obtained a $121.7 million judgment against Franchise Pictures alleging fraud. This, coupled with significant cash flow problems, propelled the company and its 52 special purpose entities (SPE’s) into Chapter 11. Shortly before filing for bankruptcy, Franchise Pictures engaged us as its Chief Restructuring Officer and restructuring advisors.
When our engagement started, the Franchise Debtors’ estates had extremely limited cash and financial records and numerous creditors with liens against the assets of the estates. We successfully reconstructed financial and legal records and negotiated the sale of the rights to motion pictures, free and clear of all liens, in order to infuse the estates with cash. Following extensive negotiations, we settled with all of the Debtors’ claimants, including Intertainment AG, Warner Bros., Morgan Creek Productions, Comerica Bank, the Screen Actors Guild, Writers Guild of America and the Motion Picture Industry Pension and Health Plans, among others. This allowed for the filing of the Debtors’ Joint Plan of Liquidation, which was confirmed in March 2010 and resulted in a substantial recovery for unsecured creditors.
Globe Security Systems (Sahlen and Associates)
Globe Security Systems was, at one time, the third largest security services company in the nation. Recruited by the Board of Directors after members of the senior management team were convicted of securities fraud, we brought in a new management team to restore profitability, reconstructed financial and operational data, and restated financial statements. This resulted in the strategic sale of the company to a competitor, Borg Warner Security.
Pacific Title and Art Studio
Brincko Group was initially engaged as Chief Restructuring Officer in connection with a possible recapitalization of this 90-year-old Hollywood post-production facility. When the company’s equity sponsors declined to contribute any additional funds, the secured lenders had us appointed as Receiver. In this role, we operated the business on a day-to-day basis until all work in progress had been completed and all outstanding receivables had been collected. We also managed employee layoffs, litigation matters, and potential sale opportunities. Ultimately, we liquidated the company’s assets through an auction process.
This publicly held multi-billion dollar international semiconductor manufacturer reported a loss of $2.4 billion at the end of 2008, and, in March 2009, filed for Chapter 11 bankruptcy with approximately $30 million cash on hand and indebtedness of $1.5 billion. We were engaged as CRO and interim CFO to analyze the company’s financial operations, recommend turnaround strategies for its significant losses, and evaluate its management team. Our services included review, analysis, and development of strategic business plans, cash flow projections, and feasibility studies, as well as claims processing, liquidation analysis, and contract reviews. In May 2010, Spansion emerged from bankruptcy, having reported four consecutive quarters of operating profit, with approximately $230 million in cash and less than $480 million in debt. Brincko Group was nominated for two M&A Advisor 2011 Annual Turnaround Awards for its work in connection with the bankruptcy reorganization of Spansion.
We were engaged to sell the assets of this company after a shutdown of its operations. After an evaluation of the liquidation value of the inventory, a recommendation was made to restart limited operations to enable the company to be sold at an enhanced enterprise value. Our staff commenced limited operations, and managed the bid process and sale transaction. Creditors received more than twice the anticipated liquidation value.