When an 80-year-old family-owned business was forced to file for bankruptcy following a generational transfer, the family turned to CSuite’s Randy Weaver for guidance. With his expertise in turnarounds and calm approach, Weaver helped the family navigate tough decisions and restructure the company, ultimately leading it out of bankruptcy and into a successful sale.
Challenges
Weaver’s first task was helping the family come to terms with the tough choices ahead. The business had amassed significant debt, which was purchased by an investor group during a distressed sale. The investor group presented the family with two aggressive options:
- Pledge remaining assets (real estate and auto dealerships held outside the business) as additional collateral and invest additional cash to retain control.
- Walk away with a small payout and retain their external holdings independently.
Solutions
Weaver provided thoughtful counsel to the family, guiding them through the risks and helping them make the right decision for their future. He emphasized that pledging all remaining assets was a dangerous gamble, as the business had been struggling for some time. Instead, he advised them to focus on their more stable external businesses.
- Counseled the family on the risks of mortgaging their future for a distressed business.
- Showed them that retaining their cash-generating assets was the better financial decision.
- Encouraged the family to let go of the struggling business, allowing the investor group to take ownership.
Outcome
Ultimately, the family agreed with Weaver’s advice and let the business go. The investor group took control through a bankruptcy sale, and under Weaver’s leadership, the company exited bankruptcy. Shortly after, raw material costs skyrocketed, which would have drained cash if the family had retained ownership. Because the business was now debt-free, the investor group survived the volatility and sold the company to a major international corporation. Today, that corporation is a dominant player in the U.S. market, and the family’s outside businesses continue to thrive.