Serving as CRO for a Chicago-area Grocery Cooperative
Challenge
A grocery cooperative and wholesaler to hundreds of Chicago area grocery retailers faced intensifying competition and a gradual decline in sales. In response, the board and management team implemented operational changes, which inadvertently led to significant employee turnover and net cash flow losses. The resulting liquidity shortages impeded its parent company’s ability to pay annual rebate payments to coop members, prompting a sudden and catastrophic loss of customers to competitors. The untimely customer and cash flow losses were further complicated by Chapter 7 and 11 bankruptcy filings.After securing favorable terms, our team supported the cooperative and parent company through an asset auction and inventory liquidation.
How we helped
Riveron was initially engaged to implement cash flow forecasting and to assist with rationalizing the parent company’s retail stores. As the severity of the situation became more apparent, our engagement expanded to a chief restructuring officer role, which reported to the boards of both the cooperative and parent company. In this capacity, Riveron’s team occupied key positions managing cash flows, inventory purchases, vendor relations, asset divestitures, staff reductions, and accounts receivable collections in preparation for and support of the debtor in a Chapter 11 bankruptcy process.
Results
Riveron’s rapid response efforts worked to stabilize cash flows and manage operations. Our team was then able to focus on negotiating terms and conditions for forbearance agreements and debtor-in-possession loan facility. After securing favorable terms, our team supported the cooperative and parent company through an asset auction and inventory liquidation.
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