Kronheims Furniture
Kronheims Furniture
Turnaround & Refinancing
Outline of Services Performed:
- crisis management
- turnaround management
- debt restructuring
- interim CEO & CFO
- business wind-down management
- lender development
- vendor negotiations
- employee communications
- cash management
Beneficiary of RHG's Expertise:
Due to financial difficulties faced by the Company, its bank wanted it to refinance its debt with another lender. As a result, its Board of Directors sought advice from a financial advisor who recommended that the Board consider engaging RHG to assist in the emerging issues as well as direct a turnaround and refinancing plan.
Client Quotes:
Principal
“I was asked by the Chairman of the Board of a faltering Cleveland retail business (substantial with longevity) to attempt to coordinate turnaround efforts for the company. The situation was extremely fragile, at best. My first telephone call was to Richard Henry, as I had worked with him in various capacities over the years. The Board needed someone extremely adept at the nuances of crisis management to include leadership, development of a strategy to resolve serious conflicts among the owners, and with suppliers, lenders and customers. In a relatively short period of time, Richard and his associates grasped the situation and put forth a plan, which if implemented in full, would have resolved many of the operational, financial, and personal conflicts. The plan was met with acceptance by the suppliers and financial companies. Certain measures were taken to implement the plan, and in a relative short period of time, progress was accomplished. Unfortunately, the conflict was so intense between the owners that full implementation of the plan was impossible. The important point is that Richard Henry and his team knew exactly what had to be done and how to do it. I highly recommend Richard Henry and his associates. ”
Detail of Services by RHG:
Given the serious circumstances, RHG quickly:
- assessed the financial situation,
- developed a strategy to negotiate extra time from the bank, and
- provided the bank with a cash flow, operational and financial plan to accomplish the short-term goals.
After reviewing RHG’s strategy and financial plan, the bank granted the Company sufficient time to refinance the debt. Then, under RHG’s guidance, the Company was able to attract a non-bank financial partner to enable the Company to refinance the original debt and put in place the operational turnaround plan developed by RHG. During the initial phase of the turnaround plan, RHG provided interim CFO services for the Company.
After RHG’s initial role was completed and while the turnaround plan was into its fifth month, the President of the Company resigned. Given this development and a slow retail climate, the Company’s Board of Directors elected to close the business but engaged RHG to perform interim CEO and CFO functions and manage and direct all of the daily functions of the Company to close the business in an orderly way. RHG successfully completed this assignment in the second quarter of 2005.