Service Industry -- Vending machine supplier
Timely sale of a business
We were asked by a lender to oversee the operations of a distributor of vending machine provisions, including such items as cookies, potato chips and candy bars. The lender had just discovered a massive fraud that included both a kiting scheme and the use of fictitious invoices. After a brief analysis of the situation it was determined that the best way to preserve value in this case was to not only oversee the operations, but to quickly sell the business as a going concern. A determining factor in reaching this decision was the perishable nature of the inventory. This type of inventory is dated and when the inventory ages past its dating it loses its value.
The decision was quickly made with the owner's consent to commence the sale. A strategic buyer was located and a sale was consummated within thirty days.
While the lender did not recover all of its loan from the proceeds of the sale, it recovered significantly more that it would have in these circumstances if the inventory had aged out and become worthless.