Wind Down of An Apparel Wholesaler

Sustainable Apparel Group

Kansas City, Missouri

Challenge

Apparel Distributor. $20 million revenue. $6 million of debt.


  • Branded apparel wholesaler and retailer defaulted on loan covenants.
  • Inventory was stored at two separate third-party warehouses located across country.
  • The field exam revealed fraudulent reporting of collateral values on the borrowing base.
  • Lender terminated the credit facility, the company abruptly shut down its wholesale business and terminated all employees.

Solution

  • MorrisAnderson was appointed Receiver to identify and sell assets to apply against the bank debt.
  • Initiated communications with the wholesale customers, identified un-billed shipments and generated new invoices, and assessed value of the e-commerce business.
  • Determined incremental value in operating the e-commerce retail business while seeking buyers for the inventory, the retail business, and the intellectual property.

Results

  • Located and organized the records, obtained access to the Inventory and negotiated agreements with the warehouses.
  • Obtained staff to administer the business wind-down, secured and stored the accounting books and records, archived electronic data and emails, notified stakeholders of the receivership proceedings and facilitated the claims process.
  • Closed on sale transactions for inventory and business, the net recovery for the secured lender achieved expectations of the initial budget.

Daniel Wiggins

Daniel Wiggins is a Managing Director at MorrisAnderson with notable turnaround and transaction experience. In building value for his clients Daniel focuses on enhancing stakeholder relationships that optimize business continuity and he frequently leads negotiations with clients’ key suppliers, customers, and lenders – particularly during restructuring initiatives. An additional focus of Daniel’s engagements is mentoring… Read More