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and what wasn’t, and development
of subsequent plans for execution.
To meet the tight time frame, the
investment firm used a SWAT team
approach, complementing its limited
personnel with outside consultants from
the corporate renewal industry. Since
the firm needed to prepare quickly for
improvement initiatives available to the
company during the bankruptcy, two
teams were deployed—one on-site at
the company and another in Chicago.
As a countermeasure, to support the
company’s cash needs and preserve a
business worth acquiring, the PE firm
agreed to participate in the DIP loan
with the prepetition lenders. This vastly
improved the business’ ability to make
domestic and international purchases
of raw materials, parts, and finished
goods. It also greatly improved the
prepetition lenders’ certainty of closing
the deal and helped create a relatively
cooperative bankruptcy process while
preserving key customer relationships.
The 100-day plan was the roadmap
prioritizing tactical execution during
the critical period exiting bankruptcy
and also provided visibility and
accountability for both the company
and investors during this sensitive
time for the business. As such, it
enabled management to stay focused
on the “precious few”—objectives vital
to the company—and set reportable
measures of success for each. It
allowed for reward and recognition
of what was working, while course-correcting for areas that weren’t.
The Chicago team coordinated the due
diligence for the quality of earnings,
voice of the customer, environmental,
legal, insurance, etc., all of which
were performed in a limited but
thorough, extremely fast-tracked
process; prepared an investment thesis;
and negotiated the asset purchase
agreement. The on-site team worked
with company management and with
outside performance improvement
and restructuring advisors to formulate
the investment thesis, the action steps
to be implemented immediately post-petition and, later on, the 100-day plan.
While waiting out the 363 process, the
on-site team assisted management
with executing performance
improvement initiatives made possible
by the bankruptcy filing. These
included firming up domestic and
foreign vendor relations, advising on
post-close production agreements,
renegotiating leases and executory
contracts, eliminating restrictive joint
venture and distribution agreements,
implementing faster improvement
at local production and distribution
facilities, and consolidating unneeded
locations and operations.
Some key elements of the 100-
day plan and their results were:
The PE firm leveraged its hands-on
knowledge and understanding of the
bankruptcy process to move quickly,
preserve enterprise value, and take
advantage of bankruptcy to make a better
business. For example, the on-site team
tore apart the company’s debtor-in-
possession (DIP) budget and identified
multiple shortcomings. Among
other things, the company’s plan was
essentially a liquidation of its inventories,
which placed unacceptable risk on the
business. It would delay the company’s
turnaround post-close while it waited
for tools being shipped from Asia. More
importantly, it would further exacerbate
already dangerously low fill rates, putting
important customer relationships at risk.
efficiencies: Resulted in $1
million in annual cost savings.
•;Reduce backorders: Decreased
to $500,000 from $2.2 million.
payable outstanding (DPO)
increased from five to 25 days.
•;Re-energize sales: A “We’re
Back” Initiative regain more
than $1.3 million of business
lost during the bankruptcy.
•;Return to standard production/
sourcing levels: Rebalancing
resulted in the reduction of 34
temporary manufacturing positions.
•;Develop financial reports and
measurements: Key performance
measurements were identified
and regularly reported on.
After the bankruptcy filing and up
to the date of the 363 auction, the
PE firm’s on-site team performed
significant additional work with
management to devise a 100-day
plan. This process emanated from the
prepetition diligence, which provided
the initial draft of continued post-acquisition value creation initiatives.
While the first 100 days are absolutely
critical, the value creation journey
certainly doesn’t stop there. A
culture of continuous improvement
must be created. In Senco’s case,
that process started during the first
100 days and continues today.
Jon Kris Consultants, Inc. Executive Search dedicated in recruitment of
professionals in the Restructuring, Litigation Support, Forensic Accounting,
Valuations, Distressed Debt, and Finance areas.
We share the vision, spirit and commitment, with our clients, and offer a
cutting edge with an eye to progressive success at all levels of employment.
To acquire an individual or a group of professionals in any major U. S. city,
please contact Bruce Peters or Jennifer Eible.
One of the first areas to address was the
need to adjust the leadership team to
meet the needs of the business going
forward. The concept of continuous
improvement starts with the CEO and
becomes a part of the culture. During
the first six months post-close, the PE
firm introduced a new CEO, CFO, and
COO, all of whom were practitioners
of continuous improvement. The
new team immediately prepared an
analysis of the company’s strengths,
weaknesses, opportunities, and threats
(SWOT), and identified several key
areas that needed to be addressed.
JON KRIS CONSULTANTS, INC.
Founded 1982 • Member of TMA
973.236.1800 • Fax 973.236.1600 • www.jonkris.com