MorrisAnderson Saving a Company under Criminal Investigation

Challenge

---

$20 million Cherry Processing Operation. $6 million debt.

---

• Owner caught growing Marijuana in facility by City Government Officials.
• Owner commits suicide, leaving company with no leadership.
• Bank concerned that situation could unravel leaving loan at risk.
• Company negotiating with Government on settlement as well as keeping business operating.
• Customers very concerned with situation and impact on brands.
• All institutional knowledge was with owner.
• All relationships with customers and vendors were with owner.
• District Attorney is very concerned with the environmental breaches found in the company that led to the search warrant.
• Company had relied on City grants that were cancelled.
• Accounting records incomplete and difficult to create.
• Bank required refinancing.

Solution

---

• MorrisAnderson Principal named Chief Restructuring Officer.
• Restructured management, creating specific responsibilities for each family member based on experiences within company.
• Met with government officials to discuss environmental concerns. Hired Environmental Consulting Firm to perform audit and negotiated settlement with government.
• Met with Key Accounts and Key Account Rep Groups to provide confidence that the new management team was in place and responding to needs.
• Updated accounting policies and procedures.

Results

---

• Company maintained 95% of Key Accounts.
• Company settled charges with DA and paid fine after refinancing of loans.
• Company was able to refinance debt.
• New Management Team maintaining inventory levels and succeeding in on time delivery of products.
• Diversified management team allowed specialization of duties and did not require one individual to be responsible for all aspects of company.
• Reduced procurement costs by 15%.
• Accounting reports filed monthly within 20 days of month end and numbers are accurate and defensible.