Millions of dollars of debt settled at 18% (an
82% reduction)
The client company approached us with just
over 6 million dollars in debts, including numerous vendor payable
accounts.
One of the vendors was owed 3 million dollars alone and that is one that we
didn't deal with. The remaining 3 million dollars in debts was researched and cataloged
by our negotiations team - a project made more complex by the large
number of individual vendor accounts.
The company had already been shut down by the banks because of
overdrafts and charge backs, so our salvage strategy had two main
goals:
- Prevent the client from having to file a Chapter 11 Bankruptcy
- Arrive at amicable agreements with the unpaid
vendors to resolve the outstanding bills and debts using available
cash on hand, and at the same time create a scenario that would
leave the owner with sufficient surplus for a new start.
The banks had charged the client company more than 1 million dollars in fines due
to the delinquent status of the accounts.
As research of the various vendor accounts progressed, it was determined
that a large percentage were overseas, including many in Japan.
We approached the vendors on the basis of settling, compared with the
alternative of a complete default which was imminent and probable
in the event of a Chapter 11 filing. Priority claims would leave most of
these accounts faced with a "no payment" option, so it was in the
best interests of all of the vendors to cooperate. The result
we presented would realize a win-win outcome for all parties concerned.
We settled more than 250 vendors for 18 cents on the dollar and saved
the client 2.4 million dollars.
The company had to go out of business, but came away with enough
of a surplus to be able to start a new endeavor.
Thus our company was able to achieve the goals we
had set out with this client: we successfully freed the client
from certain bankruptcy, and there was enough surplus left after
our negotiations for a fresh start.
We are happy to discuss your situation with you. If your business
is in danger financially, talk to us and we will give you our most sincere
assessment of what course of action will best handle your situation.
Please visit the Clients
Page of this site for more information on the types of
clients we service, or contact us directly by submitting a consultation
request form or by using our direct
email form.
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