The Problem

• Medium size retail company hit hard by economic downturn and verging on bankruptcy.
• Substantial trade debt resulting from slow sales and high inventory.
• Situation aggravated by changes in trade terms from long installment agreements to net 30 or cash.

The Solution

• Reduced inventory to produce cash.
• Negotiated “packaged buyout” of all major accounts-payable at 38 cents on the dollar.
• Produced new external financing to pay off remaining debt and purchase new inventory on cash basis for extremely favorable discount.

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