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ELECTRONICS-INSTRUMENTATION-METAL FABRICATION
WEAPONS SYSTEMS

THE COMPANY

Publicly held Government Contractor of Electro-mechanical devices with subsidiaries engaged in both light and heavy metal fabrication and computer software development.

THE SITUATION

Acquisition "binge" by this $ 30 Million company, coupled with poor management, completely depleted company's financial resources resulting in inability to acquire materials, default in debt and negative net worth of $ 8 Million. The banks called their loans.

ACTION

Engaged as CFO to develop and implement Restructuring and Recovery Plans. Stabilized cash flows and reinstated bank lines; secured interim financing through contacts in the financial community. Secured Board approval to replace top corporate management.

Managed the sale and/or closing down of four divisions; completely revised management information, reporting and control systems; designed and implemented mechanisms for quoting, budgeting and planning systems.

RESULTS

Authored and implemented out-of-court financial restructuring resulting in substantially all debt being converted to equity, including secured debt owned by an agency of the U.S. Government. Negotiated with two major banks, the Department of the Army and The Federal Reserve Bank of New York.

Negative net worth, negative cash flow and severe losses were reversed within six months. Company was eventually sold to a major corporation.

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© 1999, 2001 R.N. Seidman & Partners, Ltd.