Case Study:
3rd-party Logistics Provider to the California Wine Industry
Harney Partners was called in to provide leadership at the Company and, ultimately, to wind down operations and liquidate assets
Company in Central CA Coast wine country provided trucking services to move grapes, bulk wine, and bottled wine for vineyards using 110 tankers, vans, reefer units and flatbed trailers. They also stored bottled wine in temperature-controlled warehouses (two 100,000 sq ft locations) on behalf of customers. Company was privately held by two related PE firms, a 30% former owner, and was being managed by members of PE firms . The CEO and CFO abandoned their roles without informing employees, effectively giving the keys to the secured lender. When Harney was engaged, there was no leadership at the company, and the 51 employees (30 truck drivers, 9 warehouse employees, 12 admin) had no communication regarding their jobs. The company was faced with poor financial performance, ongoing cash losses, and was in default with its lenders.
The Solution
A Harney Partners Managing Director was appointed CRO by the Company’s Board of Directors.
Developed a monthly operating budget and kept the secured lender informed and engaged during the wind-down.
Identified key employees and negotiated stay agreements with the controller, warehouse managers and warehouse workers.
Cleaned up invoices and brought customer billings current.
Negotiated with customers for payment of AR. Kept control of warehouse product until customers paid full balance.
Negotiated with key vendors (fuel, insurance, forklift lessors, landlords) to maintain operations during the wind-down.
The Results
Due to the severity of losses over an extended period of time, the operation had to be liquidated.
HP conducted a competitive bidding process for the assets by reaching out to buyers with similar operations in Central and Northern California wine regions.
HP wound down operations in an orderly fashion, outside of any legal proceeding.
Secured debt was paid in full. Second lien debt received a substantial pay down.
All employee liabilities were paid in full.
Services & Roles
Turnaround and Restructuring
Chief Restructuring Officer
Financial Advisory
*Some engagements may have been performed by team prior to joining Harney Partners.
