do this—are so fixated on accrual books
that they pay absolutely no attention
to the cash. You can have all the
accrued sales you want. Your top line
can be growing like crazy, but you can
run into cash flow problems. A lot of
companies just aren’t prepared for that.
You can figure that out by digging into
their financial statements and their
books and records and help them plan,
prepare, and fix that particular situation.
Then they can take off and grow. That’s
what I’ve found to be the most fun.
Q What I found interesting in looking through your biography
was that you seem to do a lot of cases
that involve fraud.
You can’t get into this line of
work without encountering fraud. Fraud
is both a reason that companies
encounter cash flow problems and a
consequence of the problems.
Sometimes companies have someone
inside skimming the cash or product,
which leads to cash flow issues. Other
times, declining sales or a shortfall of
cash leads the management team to hide
the problem in the financial statements.
That works until it doesn’t.
The CRO or financial advisor has to
go in, examine the books, and get the
financial information straightened out. I
always look for fraud as part of the search
for figuring out what the problem is.
Q What have been some of your most gratifying or favorite engagements?
One was Budget Rent a Car,
Budget Group. I was financial advisor to
Budget Group in preparing them for
bankruptcy and running them through
bankruptcy in 2001. We sold the assets to
Avis, and Avis took the assets and all the
people. That left nobody running the
bankruptcy estate except me.
I ended up doing all of the accounting
work, all of the financial work, most of the
work in finalizing the estate and helping
it through the tax and accounting issues
and preference actions, litigation, to close
the estate. It took several years. It was a
very large company, of course, when it
was operational. That was the first time
I’d handled so large a company through
the whole process, and it was a lot of fun.
The other case that probably was the
most interesting was USA Commercial
Mortgage. It was a Las Vegas firm.
Management took money from
investors, many of them retired, pooled
their money together, and invested in
commercial mortgages. They would
pool money from 50 or 60 people,
and they lent that to a developer.
Of course, in 2005-06 the bottom
started dropping out of the real estate
market, and some of these loans went
bad because they were lent to very
speculative ventures. The gentleman who
was running this didn’t tell these retired
people that the loan they had invested in
was going bad. He just kept paying them.
So, of course, he paid them with other
people’s money. Instead of giving the
money back to an investor whose loan
was actually paid off, he used the money
to make payments to all the investors.
We were dealing with 5,000 or 6,000
people who had invested in his projects.
A lot of them were elderly. A lot of them
had given him their retirement money.
He was paying them 12 percent interest
at a time when interest rates were a lot
lower. My recollection is that they were
more like 4 or 5 percent at that point,
and they couldn’t live on that, so they
had given him their money to get 12
percent interest. And then they were
faced with possibly receiving no money.
We had to deal with all of their upset
and problems, and figure out where
the money went. We had to figure out
how to foreclose on some of these
projects and get some money back in
for investors. One group of investors
got 75 percent of their money back.
Some of the others for whom we got
their loans to pay off got 100 percent
of it back. For others, we were able to
get a percentage of it back to them.
They ended up in a lot better shape
than they could have, but it was a very
long and painful process for them. It
was actually one of the more interesting
cases I’ve worked on. Where did the
money go? Who got it? Then in tracing
it and trying to find the assets so that
we could bring them back into the
estate, sell them, and pay people.
Q Were you dealing directly with the investors in that case?
I had to do several town hall
meetings where we invited the investors
to come in, ask us questions, and run
through the accounting and their revised
statements. We explained what had been
going on in the bankruptcy process. It
was pretty bad. People would come in
holding their old statements and say, “It
says right here I have this money.” And
we had to tell them that they had been
Q That must have been heartbreaking, dealing with retirees who were
unwise enough to move too much of
their retirement money into one vehicle.
You can understand why
they did it, but it was very heartbreaking.
We had people come to court hearings
with their oxygen machines, saying, “I
need my money. I have to pay for my
The ones that I feel sorriest for are
those who ended up in some of the
projects that were in litigation. It took
them a lot longer to get a return.
Unfortunately, so much delay for
people who are older is a big problem.
The principal of that company went
to jail for 12 years for wire transfer
fraud, and I think that actually made
a number of them feel better.
Q What role has your TMA membership played in your career?
I joined TMA fairly early in
my career. TMA taught me how to
network. I didn’t have a mentor or a boss
who took me out to introduce me to
people. TMA gave me a group of people
to network with. They welcomed me into
the group. They helped me to meet other
professionals. I found that I could meet
lenders, investors, lawyers, auctioneers,
equipment people—everything I needed.
The people I met through TMA are
the people I’ve used all of these years
when I’m working with a company that
needs financing, for example. I have a
whole list of TMA members that I can
ask to help me, whether it’s for DIP
financing or for financing a company
that’s not in bankruptcy. If I have to sell
equipment, I have people from TMA who
can do that for me. If I need a lawyer
who specializes in something, I’ve met
them through TMA. It’s been a fabulous
place to network and find people that
I can work with because you can’t do
restructuring without all of these other
people to help you through the process.
I started networking locally, of course,
and when I became Florida Chapter
president I started going to national
events, and I met people from all over
the country. And in today’s world, you’re
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