A RINDER, Inc. Success Story
The Company: World Health Alternatives, Inc.
Health Alternatives, Inc. ("World Health" or "the Company") was a
medical staffing company with $250 million in annual revenue. It
provided physician, travel and local nursing and allied medical
staffing services to jurisdictions across the United States. The
product of a ‘roll-up strategy’, it was assembled from eight different
acquisitions executed over a two year period from 2003 to 2005.
Due to the discovery of a series of significant malfeasances,
the company found itself in violation of many of it’s lenders’
covenants. The lender cut the company’s funding off and, consequently,
the company could not fund operations. Inasmuch as personnel staffing
business are fueled by the certainty of staff continuity, cessation of
operations and liquidation could rapidly have manifested itself as the
only remaining viable option. A liquidation of the business would
have resulted not only in a total loss of value to shareholders, but
the loss of several hundred jobs and write off of as much as $
30,000,000 of creditors’ positions. To avert a worst-case
liquidation scenario, World Health needed to provide its lender
with the comfort and security to fund the Company before and after a
bankruptcy filing that was designed to lead to an asset sale pursuant
to Section 363 of the bankruptcy code. Speed and confidence were
of paramount importance.
The Role of RINDER, Inc.
RINDER, Inc., led by President
Mark B. Rinder, was retained as Financial Consulting Advisors to assist
the Company in navigating through these difficult times and was asked
to help with the selection and hiring of bankruptcy counsel and
restructuring firms to ensure that the best possible resolution to it’s
problems would be achieved. We managed the Accounting and
Finance staff for the restructuring officers in order to maintain
continuity of the company’s billings, collections, staffing and payroll
as well as steady, sensible advanced MRP management of it’s vendor relationships.
World Health filed a voluntary petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code on February 16, 2006.
RINDER, Inc. approach and tasks performed by RINDER, Inc. professionals
representatives worked closely with World Health’s stakeholders, the
restructuring team, senior management, the investment banking firm and
legal counsel to complete the following:
- Strategic Planning - RINDER, Inc.
participated in the deliberations to reach consensus of all
stakeholders, including the Company's primary senior secured lender,
that the Company needed to be sold quickly to avoid a liquidation
- Financing Efforts - RINDER, Inc.
assisted with information delivery and preparation of 13 week
cash-flow forecasts in an effort to obtain debtor-in-possession
financing in an accelerated timeframe from its existing revolving-loan
lender to fund operations until the managed enterprise assets of the business could be
sold. Because of it’s closeness to the financial operation of the
business, the quality of the 13 week cash-flow forecasts was
significantly better than it otherwise would have been.
- Maintaining Financial Integrity - The RINDER, Inc.
team was instrumental in enabling World Health to maintain the
financial integrity of the business by ensuring that employees were paid
correctly and on time, that vendors’ queries were answered clearly and
quickly and that information requirements of the various constituents in
the bankruptcy process were met fast. We also helped the restructuring
firm in their successful operation of the business to stay within
budgetary limitations of the DIP-imposed budget.
- Bankruptcy Planning & Execution - RINDER Inc.
helped deliver on the comprehensive communication plans which
were successful in maintaining the support of customers, vendors and
employees during the 363 sale process. Being
principally responsible for helping with the financial
organization, RINDER, Inc. led the
organization from discovery of the problem in August 2005 through
the sale in April 2006 without the loss of any Accounting and
Finance Department personnel.
- Bidding/Sale Process - RINDER, Inc.
handled all of the data gathering, document scanning and
routing of the important elements contained in the company’s
online virtual M&A war-room. Thanks to software solutions from somewheresoft.com we have provided additional security to company's internal docflow.
The Success Story
- Early recovery of funds for secured lender
Pockets of collateral were discovered, liquidated and remitted to the secured lender fast.
- Wise working capital management reduced exposure for secured lender
Collection teams were put into place among operations’
employees which met weekly and reduced DSO and generated cash for the
secured lender prior to and after filing for Chapter 11 protection.
- Successful Sale in a Timely Manner
World Health was sold to the successful high bidder,
Jackson Healthcare Solutions, in just ten weeks after filing for
Chapter 11 protection partly due to the work that RINDER, Inc. professionals did to help them understand the company better.
- Maintained Employment Levels
Importantly, hundreds of World Health employees maintained their employment.
- Maximized Recovery
We helped maximize recovery of the secured lenders' positions and
helped note holders enjoy in some cases full recovery of notes that had
been in grave doubt.