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ASSIGNMENTS FOR THE BENEFIT OF CREDITORS (ABC's)
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Fuller Evangelistic Association, a non-profit organization met with financial
reversals, its board of trustees relied on our advice. An ABC was implemented
because it uniquely suited the needs of the organization while providing for
the payout to creditors as assets were liquidated. An initial distribution was
made to the creditors and all debtor/creditor issues have been satisfactorily
resolved. |
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Zenith Wheel Corporation, a manufacturer and seller of automotive wire wheels,
faced litigation concerning its right to the name “Zenith Wheels” and the
manufacturing style of wire wheels it was using. Serving as Assignee,
we defended the litigation and instituted a cross action. Ultimately a
settlement was successfully negotiated which enabled a sale of the name
“Zenith Wheel” as well as its wheel styles. |
RECEIVERSHIPS
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Centerpoint Mortgage Corporation, a mortgage company and broker, found itself
overextended and in irremediable financial circumstances when interest rates
began to increase in late 1998. In May of 1999, Centerpoint Mortgage
Corporation commended its voluntary wind-up and dissolution and chose us to
conduct the liquidation of its assets and the wind up of its business affairs.
Located in Orange County, California, CMC did business in a number of states
scattered across the country. At the time of our appointment, more than fifty
mortgages issues by CMC were standing of record in the name of CMC in
Minnesota, New Jersey and other states. As a Receiver, we pursued these
legally and factually complex issues with an eye toward realizing assets to
pay a meaningful dividend to creditors. |
INTERMEDIATIONS
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principal shareholder and CEO of an importer called a CPA in great alarm. The
Company was losing money; their bank had just completed an audit and indicated
an increase in borrowing reserves was anticipated; a substantial and growing
amount was due to their largest vendor; and a minority shareholder who had
advanced funds to the Company demanded payment. The CEO concluded bankruptcy
was the only alternative. The CPA told the CEO to call us. During our initial
assessment, we reached a different conclusion. We told the CEO he could
restore profitability if he would close an out-of-state office and reduce
staff. These moves lowered his breakeven point from more than $11 million to
about $8 million. 9-11 and other factors beyond his control curtailed
successful implementation of the plan. Faced with $3.5 million in out-of-trust
debt, a personal guarantee of $500,000, and needed inventory embargoed in
China, the firm and the bank were at a brick wall. Equitable Transitions
negotiated an informal receivership with the firm’s bank and pursued a 6-month
plan that included bringing “goods” into to the country as shipments were
permitted. This resulted in a 60% recovery versus a probable 20% recovery.
With the concurrence of the Bank, this resulted in the formation of a new
company. |
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