By Rob Taylor, Managing Director, Strategic Financial Consulting
The need for restructuring support isn’t always obvious at the outset. Typically, the initial signs are much simpler, such as a key finance role needing to be filled. For one struggling private equity-backed commercial property services company operating from multiple locations throughout the U.S., LCG’s Strategic Financial Consulting (SFC) team was initially brought in to temporarily fill a vacant controller position. Soon after, the need began to change.
The Challenge
Shortly after the SFC team stepped into the controller position, the company’s CFO was redeployed by the private equity sponsor, leaving another critical role unfilled. But that was not the only gap. Additional positions soon opened through attrition across FP&A, accounts payable, accounts receivable and collections, and staff accounting. Rather than filling a single temporary vacancy, the SFC team increasingly became responsible for keeping the broader finance function operating smoothly until the various positions could be filled.
At the same time, liquidity was tightening. The company needed credible financial reporting and a clear understanding of its cash position, but visibility alone wasn’t enough. It also needed a team capable of acting on that information. What began as finance backfill was evolving into a much more impactful engagement.
The Approach
Our SFC team assumed responsibility for financial reporting and month-end closing while building a 13-week cash flow forecast to provide a week-by-week view of the company’s liquidity. In a distressed situation, knowing where cash stands is only useful if you can act on that information. LCG worked directly with vendors to negotiate payment timing and help extend the company’s available runway. At the same time, the team took an active role in collecting outstanding receivables, bringing cash back into the business.
Together, those efforts gave the company and its sponsor greater visibility into incoming cash, which expenses needed to be paid, and how much time remained to evaluate the next move. That time mattered. The next decision was no longer simply about stabilizing operations. It was about determining where value could still be preserved and which path forward made the most sense.
Navigating the Transition
As the strategy shifted, LCG’s role shifted with it. The SFC team worked alongside the company’s investment bankers as two divisions of the business were carved out and ultimately sold. While those transactions moved forward, LCG continued to manage the finance function and the company’s limited liquidity.
For the remaining business, the path eventually shifted toward an orderly wind-down through an Assignment for the Benefit of Creditors (ABC). LCG worked with legal counsel through the state-specific ABC process and coordinated with the assignee as the company’s remaining assets, including machinery and equipment, were liquidated and field locations were closed. Our team also oversaw the preparation of pre-filing tax returns and K-1 distributions.
Throughout the process, the work remained hands-on: managing the cash, maintaining the reporting, collecting outstanding receivables, coordinating with the other advisors, and keeping the process moving.
The Outcome
Over nine months, LCG’s role evolved from filling a single vacant finance position to helping the company and its sponsor navigate a broader restructuring and eventual wind-down. Along the way, two divisions were successfully carved out and sold, vendor negotiations helped extend the company’s runway, outstanding receivables were actively collected, and the finance function continued to operate through a period of significant transition. There wasn’t a single solution that applied from the beginning of the engagement to the end. As the company’s circumstances changed, so did the priorities and the resources required to address them.
Conclusion
For private equity sponsors, financial distress does not always present itself as a clear restructuring decision. It may begin with a leadership gap, tighter liquidity, unmet expectations, or a finance function struggling to keep pace. What matters is recognizing when the situation has changed and having the visibility and resources to respond.
In this case, maintaining the finance function provided continuity. Managing cash created additional runway. That runway gave the sponsor time to evaluate its options, preserve value by selling two divisions, and ultimately execute an orderly wind-down of the remaining business. When the original plan changes, having the right financial resources in place can help preserve something just as important as cash: options.
LCG’s Strategic Financial Consulting division provides tailored advisory services to private equity firms and family- and founder-led businesses navigating restructuring, liquidity challenges, and other complex financial or operational situations. For questions or to schedule a consultation, contact Scott Webb at [email protected].