The Situation
• The Department of Justice and Securities & Exchange Commission were investigating the company and its former officers for a variety of improprieties such as securities fraud and accounting fraud
• The company was also under investigation by a group of 22 state attorneys general for alleged fraud in the sale of credit insurance
• The company had no senior management
• Lenders had lost confidence and begun to take large reserves against availability
• Vendors were not shipping because they had not been paid and had lost confidence

The Solution
• Immediately addressed the "credibility crisis" by developing an aggressive communication strategy with all key constituents (the government, the lenders, the vendors and the employees)
• Aggressively managed cash
• Negotiated an agreement with trade vendors to support the company through the holiday season
• Obtained incremental financing in the form of secured loan junior to the company's existing lenders

The Results
• Cooperated fully and completely with the government and state attorneys general and settled all matters
• Executed a secured trade creditor agreement and vendors supported the company during the holiday season
• Obtained incremental financing in the form of a junior secured loan