Negotiating a Consensual Debt for Equity Conversion


Annual Sales


in Debt

Peoples Education, Saddle Brook New Jersey


School Publisher serving K-12 grades. $10 million sales. $6 million debt.

  • Common Core Curriculum required in 2014, changing testing methods and requirements.
  • Recession had reduced funding available at schools.
  • Equity no longer willing to provide funding necessary for turnaround.
  • Sales had been falling for 5 years with no response from Management Team.
  • CEO had been fired and entitlement culture pervaded the organization.
  • Senior Lender was requiring control prior to agreeing to provide additional capital to company.
  • Vendors extended to fund operations and no ability to fund the $1.5 million in excess payables.


  • MorrisAnderson hired as CRO to negotiate deal with Lender and to reach settlements with vendors.
  • Realistic Projections created to determine actual working capital requirements for company to fulfill orders.
  • Reorganization of Senior Management Team, reduction in Cadillac benefit plans, right sizing of compensation and creation of measurement tracking systems to analyze results to budget.
  • Reorganization of reporting network.


  • Secured Lender converted debt to 90% equity and provided funding necessary to continue operations.
  • Vendors agreed to a 50% reduction in outstanding payables and a payment plan that started 6 months into the future.
  • Company refocused sales and marketing effort on new targets.
  • Consolidation of all operations into a single facility to breakdown communication barriers.
  • Company reduced monthly burn by $400K and returned to profitability.