Our Services

TURNAROUND & RESTRUCTURING ADVISORY

A successful turnaround and restructuring is a team effort. Management knows their business, we know what’s required to achieve a turnaround.

 

We work closely with management to understand the problems, create a solution, and most importantly help management drive the implementation.  Often the solution is the easy part, making it happen often needs Scouler-experienced turnaround leadership as part of the management team.

 

We create the runway necessary to implement the turnaround and restructuring. This is achieved by aggressively managing liquidity, immediate cost cutting and regular communication with the company’s lenders and other stakeholders. Regular, informative discussions with all parties are essential.  We institute a weekly call to provide progress reports.  Turnarounds and restructurings usually take longer than most people, especially lenders, expect. We know how to manage expectations. Progress is not a straight line.

 

Specifically, our turnaround and restructuring services include:

 

  • Building a 13-week cash flow forecast that is realistic and achievable. An immediate understanding of liquidity is essential for setting priorities.  If the company cannot make payroll Monday, then it’s the fire drill game plan.  If the company is cash flow positive from operations but can’t make a principle payment in 60 days, then there is time to develop a comprehensive turnaround and restructuring strategy.
  • Business Plan and Strategy review, development and implementation. As an independent party whose sole goal is a successful turnaround and restructuring, we can put everything on the table.  Headcount, sale or closure of underperforming plants or products, unprofitable customers, the unique dynamics of a family business.
  • Creditor Negotiations. Most turnarounds and restructurings involve modifications to the existing creditor obligations.  Our experience gives us an understanding of what is possible, whether it is lease or contract modifications, vendor management, forbearance agreements, complete restructuring of the debt or conversion of debt to equity.
  • Asset Disposition. We have developed one of the most robust networks for converting unproductive assets into cash.
  • Refinancing. Many turnarounds and restructurings face the issue of lender fatigue.  They just want out.  Scouler is especially creative in findings solutions that provide refinancing options to give the company the ability to get a fresh start.

INTERIM MANAGEMENT

Dan Scouler is a seasoned operating executive.  He started his career in Canada, where he served as Receiver Manager, the Canadian equivalent of a Chapter 11 Trustee, for several of Canada’s largest, most complex restructurings, including Fishery Products, one of the largest integrated, deep sea fish harvesting operations in the world.

 

In the US he has held many senior management positions, serving as Chief Restructuring Officer and Interim CFO and CEO across a wide spectrum of industries.

 

Specifically, our interim management services include:

 

  • Taking immediate control in crisis situations
    • Unexpected departure of a senior executive
    • Legal or regulatory actions threatening the viability of the company
    • Deadlocked ownership factions imperiling the company’s future
    • Provide leadership to jump start a turnaround allowing time to hire the best permanent replacement
    • Implementation of our full suite of turnaround and restructuring services
    • Liquidity management and enhancement
    • Business plan development
    • Profitability improvement
    • Creditor negotiations
    • Refinancing and asset rationalization

CORPORATE WIND DOWN & ASSET DISPOSITION

Most wind downs and asset dispositions fail because time is wasted and excessive expenses are incurred chasing unrealistic outcomes from unqualified buyers that inevitably fall through.

 

Fundamental to any wind down or disposition are the core principles of Speed & Certainty!

 

Speed

 

Essential for any wind down or asset disposition process. It is imperative to quickly identify the required tasks and create the game plan to get the job done. Where assets need to be monetized it is also critical to quickly understand the potential value and maximize the recovery in the most expeditious manner; this is especially true for perishable assets or assets which have heavy carrying costs.  Time devourers value.

 

Certainty

Involves getting any transaction over the finish line by creatively and effectively eliminating the obstacles. It means knowing the buyer and understanding their motivation. It means not wasting time chasing entities who throw around big numbers but are not serious about getting a deal done and have a low probability of closing.

 

Specifically, our corporate wind down and asset disposition services include:

 

  • Creation of a comprehensive liquidation analysis which identifies all assets being monetized.
    • An essential component of this analysis is a wind down budget which distributes recoveries and expenses into the proper time frames.
    • Due to the many variables which are not always fully predictable, liquidation analyses usually include a range of outcomes, a low and a high scenario.
    • Having conducted numerous liquidations over the years, Scouler will provide as tight, accurate and realistic range as is possible, historically delivering if not exceeding the high side scenario.
  • Identifying prospective buyers
    • Scouler brings a collective 60 years of experience in asset disposition, greatly expanding the universe of prospects and then laser focusing on the most likely candidates for the various assets available for sale.
    • We create a comprehensive process casting the net wide enough to capture all prospective buyers.
    • Our reputation for integrity and fair dealing gives buyers a comfort level that there is a level playing field
  • Effectively packaging the assets
    • Bulk deals versus more granular sales
    • Auctions versus private sales
    • Quick sales versus a more extended process.
    • We have conducted dozens of major liquidations in almost every industry
    • Scouler is well equipped to make the decisions which maximize the outcome, we have a proven track record of exceeding expectations.

CREDITOR ADVISORY

Scouler brings to creditor advisory the benefit of years of experience on the other side of the table.  We have run troubled companies and crafted many turnaround plans.  We know what is credible and what is wishful thinking.

 

We can quickly assess management’s agenda.  Is it to constructively work to reach a solution or are they in denial?  Are they transparently sharing financial and operational information, or do they believe cooperation is not necessary, because they have all the answers?

 

One of our most important goals on creditor advisory engagements is to establish a respectful working relationship with the other stakeholders’ professionals.  A constructive approach almost always increases value for everyone.  We don’t try to impress our clients by showboating.

 

Specifically, our creditor advisory services include:

 

  • Challenging and evaluating the company’s liquidity management and forecasting
  • Analyzing and assessing management’s business strategy and financial forecasts
  • Evaluating management effectiveness
  • Reviewing the quality and accuracy of the company’s internal controls and financial information, accounting estimates and asset valuation
  • Assisting with the negotiation of forbearance agreements and amendments to creditor agreements.
  • Providing expert testimony to support creditor goals

TRANSACTION ADVISORY

 

Our transaction advisory services include

 

  • Pre Investment Due Diligence. Our deep experience with turnarounds and restructurings as well as serving as senior operating executives enables Scouler to provide penetrating insights not typically found in standard quality of earnings analysis.  In addition to the accounting review and analysis, we include and focus on;
    • Opportunities for liquidity improvement
    • Profitability enhancements
    • Independent evaluation of management, which we believe is one of the most critical aspects of any investment evaluation
  • Two Day Quick Assessment. Over the course of any investment there are times when things don’t seem right, but you can’t put your finger on it.  This product is focused on gaining insight into a suspected issue or problem.  For example
  • Is plant management effective?
    • We quickly analyze several key metrics important to all manufacturing. The safety record.  A poor lost time performance almost always is reflective of weak controls and accountability throughout the manufacturing process.
    • Are there machines with 10 stations that are only running 5, yet the company is incurring overtime?
    • What is causing the spike in overnight delivery costs? Usually symptomatic of significant problems meeting delivery commitments.
  • Returns and Allowances
    • There are many explanations for unexpected increases in returns and allowances
    • These explanations can sound reasonable but are they true
    • Could there be quality problems that represent serious negative trends rather than temporary blips?
    • Is sales data being manipulated to hit quarterly targets or covenant compliance.

EXPERT WITNESS

Dan Scouler is one of the most experienced expert witnesses in matters relating to bankruptcy and restructuring.  He learned early in his career that to be an effective expert, analysis and other work product cannot be delegated to staff.  Accordingly, on all his expert engagements he personally does the work and writes the report.

 

There is no other way to comfortably be disposed or deftly handle intense cross examination.

 

  • Wheeling-Pittsburgh Steel Corporation / US Bankruptcy Court W.D. of Pennsylvania / 1985: Section 1113 financial analysis
  • MacLeod-Stedman, Inc. / US District Court N. D. Illinois / 1988: Liquidation value
  • Alaska Airlines vs Jet America / Pilot Integration Administrative Tribunal / 1990: Comparison of airline relative financial condition
  • Allison v. Ticor Title Insurance Company / US District Court W. D. Wisconsin / 1992: Impact of bankruptcy on value
  • Ernst Home Center, Inc. / US Bankruptcy Court W. D. Washington / 1997: Winddown costs and liquidation strategy
  • Keller Financial Services, Inc. / US Bankruptcy Court, Tampa, FL / 1998: Application for a Chapter 11 Trustee
  • aaiPharma, Inc. / US Bankruptcy Court, Delaware / 2005: Going Concern Valuation
  • LTV Steel Company, Inc. / US Bankruptcy Court, Northern District of Ohio, Eastern Division / 2007: Is the appointment of a Chapter 7 Trustee in the best interests of creditors

 

In addition to the trial testimony given in the cases listed above, Dan has appeared in many bankruptcy cases as CRO or FA to creditor constituencies in support of debtor or creditor motions.

 

Many of his assignments were cases that settled after the completion of discovery.  Two of the most significant of these were.

 

  • MILA, Inc., dba Mortgage Investment Lending Associates / US Bankruptcy Court Western District of Washington / 2008: Date of Insolvency
  • John J. Carney, Receiver for Highview Point Partners / US District Court District of Connecticut / 2013: Date of Insolvency