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Liquidating Distribution Center and Assets to Prepare for Buyout

The client is a player in the steel industry. They have steel plants, distribution centers and ore mines throughout the United Kingdom.

  • Wind down and liquidate a distribution center
Solution & Benefits

PKF Texas recommended a retention plan for the employees so that operations could continue as PKF Texas sold down inventory. 

Our team attempted to get operations people to do a full inventory to make sure we had the proper count on the books.

PKF Texas immediately started going through A/R and calling in all receivables and also called vendors to have them take back as much inventory as possible. One sale back amounted to $1.8MM.

We listed the building for sale with a broker.

The UK parent found a potential buyer for inventory, building and equipment. The terms were to stop selling inventory immediately; the sale would go through within three weeks.

PKF Texas advised the client to not stop selling inventory unless the buyer was willing to put of 10% of the $4MM purchase price, non-refundable. In this case, about $400,000.

The client did not take our advice. The inventory was not accurate and was off by several hundred thousand dollars. The buyer took two months to get to a potential close. The business was to close on a Friday. PKF Texas went through the process of terminating all employees. Most were to start working for the new company the following Monday. The buyer came in with a revised offer that was ½ of the purchase price. Our client killed the deal and decided to close shop and hold the inventory. 

Our team was still working for the client and was trying to collect on old A/R.

Needs Obstacles