Bankruptcy & Receivership

We have served in various capacities in the estates of bankruptcies and receiverships. Our comprehensive understanding of these legal estates and the related responsibilities and reporting requirements along with the experience in operating a business in crisis ensures greater success in maximizing value for all stakeholders.

Roles may include:

• Reorganization planning in preparation for filing of a voluntary petition

• Receiver, as custodian of assets and operator

• Chief Restructuring Officer

• Advisor to Creditor Committee

• Chapter 11 or 7 Case Trustee

• Advisor to debtor’s counsel

• Advisor to debtor in possession lender

 

Proven Results

Our deployment of proven effective tactical strategies in bankruptcy and receiverships enables us to reduce the otherwise heavy legal and professional expense that often impairs any recovery strategy. We work collaboratively with affected parties to achieve the best possible results.

Our involvement may include full-scale operation of a business as receiver or operator under a debtor-in-possession scenario.

​

Forensic Financial Analysis

Situations arise where suspected fraud or other illegal or improper conduct requires investigation by a credible third party. At Level Ten, we are able to provide our clients with professional forensic financial analysis to detect and pinpoint accounting irregularities and improprieties.

Working across a diverse range of industries, we have developed tools for data mining, extraction, and analysis that enable us to identify irregularities and report them in appropriate legal format. Weaknesses in internal controls may be identified and recommended solutions proposed that may minimize such risks in the future.

• Fraud Detection

• Accounting Irregularities

• Data Mining

• Data Extraction

• Regulatory Reporting

• Accounting Improprieties

Our professionals excel at presenting their findings in regulatory, criminal, civil and other proceedings, and are recognized for their ability to articulate their findings in a clear, concise, and meaningful way.

​

Organizational Structure

Effectively establishing an organization's reporting structure is paramount to overall success and growth. Proper alignment in structure:

• Creates a roadmap for reporting and decision making

• Serves as the foundation for job descriptions and department creation

• Reduces job duty redundancy

• Gives individuals direction to seek out proper leadership and decision makers

• Aligns communication avenues

• Assigns accountability for direct reports

• Assists external clients/vendors in determining and reaching proper personnel internally

• Aligns hiring, onboarding, training, performance appraisals, etc.

 

Being intentional in creating this foundational structure changes every facet of your business. Level Ten excels in aligning the right people with the right seats in order to create effective organizational structure.

​

Organizational Efficiency

Organizations frequently face difficulties developing the right plans, acquiring the necessary resources, and implementing them to achieve their goals. Structural inefficiencies inhibit the proper functioning of organizations, and can lead to unnecessary expenditures of time and money. Bottlenecks can include inefficient communication, archaic technology, poor management, lack of resources, lack of team cohesion, misaligned mission/vision, and a lack of procedural awareness.

By studying the circumstances, we identify these bottlenecks and other efficiency impairments in order to implement solutions for maximized results. Our experience enables us to objectively develop improvement strategies quickly and cost-effectively.

​

Turnaround, Restructure and Corporate Renewal

Reasons for the creation of financial distress or insolvency are numerous.  A difficult local or national economic climate, failure of a significant customer or market, and erroneous strategic decisions are only a few causal factors that may precipitate the downward financial spiral and may threaten survival. 

Regardless of the cause, companies in various stages of crisis require immediate attention.  Symptoms of distress usually appear well in advance of the onset of a crisis, including declining performance, cash flow deficiencies, and eroding collateral positions.  Often, these trends can be reversed if they are addressed early enough with objective analysis and swift corrective measures.

Symptoms of a Distressed Company

Symptoms of a deteriorating financial position may include the following:

• Tight cash situation inability to keep up with payments to vendors, payroll withholding taxes, debt service, property taxes, or rents

• Diminishing collateral or availability on borrowing base reports

• Lenders’ indication of an unwillingness to renew credit lines

• Increasing accounts receivable aging

• Decrease in customer order closure rate

• Additional borrowing necessary to cover operating or cash losses

What can be done?  Our highly experienced insolvency professionals offer a full range of advisory and implementation services, including turnaround and restructuring plans to optimized exit strategies.

In-Depth Analysis

We begin by performing a preliminary analysis of the situation, focusing on key areas believed to be major contributors to the circumstances. In certain cases, an in-depth comprehensive assessment is done where a third party, such as a secured lender, shareholder, or other significant stakeholder desires an objective opinion regarding the viability of the enterprise.  In most cases, a limited scope assessment is performed to determine whether a turnaround could result in recovering the business, without expending significant cash resources on the study itself.

Turnaround & Corporate Renewal

We then make recommendations for developing the recovery strategy, with tactical steps assigned to various professional or paraprofessional team members, as well as internal resources of the company. This methodology helps keep the cost of the recovery strategy as low as possible. Tactical steps may include:

• Communications and strategy development with all affected creditors

• Communications with financial institutions

• Communications with employees

• Development of or validation of weekly cash flow forecast models that include projected collateral analysis as well as other financial forecasting models

• Review of collateral assets for economic quality and realization strategies

• Management of inventories, receivables, and procurement

• Review of and changes in operations areas to improve efficiency, reprioritize production schedules, equipment utilization, maintenance, and inventory management

• Evaluation of utility costs and development of strategies to reduce costs

• Evaluation of personnel utilization and maximizing productivity

• Exploration of opportunities for joint venture, merger, sale, or capital raise

• Review and evaluation of sales and marketing tactics, product pricing, materials procurement, and opportunities for enhancement in those areas

​

Financial Modeling

Financial modeling, with the inclusion of all basic underlying detailed support, provides validation of assumptions as well as forecasted balance sheets, statements of operations, cash flow forecasts, collateral reports, and borrowing base metrics. Our models contain integrated links to other reporting mechanisms so that comparisons can easily be made between the actual and forecasted metrics.

Our experiential knowledge and understanding of business from the factory floor to the showroom to the front office enables us to develop these comprehensive financial models that serve as valuable tools for analysis and decision-making. The underlying assumptions and drivers of the numbers dive deep to the foundational activities that support the forecasted numbers. Flexible input sections allow if-then comparisons for the evaluation of different strategies. We provide training and support to our clients’ staff members so that they can maintain and update the models if they choose to do so.

Other valuable uses of financial models include the validation of prospective purchase pricing and terms for mergers and acquisitions, as well as support for business valuations and other uses.

​

Statistical Inventory Valuations

By deploying proven statistical sampling methodologies, a company can avoid undertaking full physical inventory counts at year end or other timing intervals. To qualify, there must be a reliable perpetual inventory system in place. We have found this tactic to result in more accuracy as fewer, better qualified, personnel are able to concentrate on a smaller population of items. With this service we can help you avoid full plant shutdowns resulting in huge cost savings.

​

Sales Tax Exemption for Industrial Processing

The rules for determining which items or activities are exempt from sales and use taxes for industrial processing are very complex. It is incumbent on those claiming exemption to develop and utilize acceptable methodology and statistics to support the allocations between exempt and non-exempt purchases. This includes sales and use taxes on energy consumed. We have found that developing our sophisticated models for making the allocations generally increases the basis for higher exemption than what the State auditors compute.

Many other states have similar statutes for such exemption. We have conducted several engineering studies and created models to compute the required allocations.

​

Cash & Asset Resource Management

Level Ten provides the knowledge and training to avoid insolvency, improve cash flow, and become financially stable by creating easy to use tools for daily resource availability analysis and helping clients to coordinate with vendors and financing partners. We work to improve collections, solidify terms and policies throughout the company along with proper deployment of the organizations resources.

Our team has established a network of relationships for traditional, non-traditional and asset-based lending. We work with clients to find short and/or long term financing in order to improve resource availability.

 

Our areas of expertise include

• Cash forecasting

• Cash modeling

• Asset based lending

• Factoring

• Inventory Analysis

• Right sizing

• Inventory valuations

• Refinancing