Resolving Troubled Situations:
Selected Client Matters



Large Mid-Western Nonprofit Organization in Financial Turmoil

Metropolitan Nonprofit Organization Needing New Focus

Restructuring of Leading Manufacturer of Specialty Packaging Machinery

Turnaround of an LBO

Strategic Repositioning of School and Art Supplies Manufacturer


Spin-Off and Turnaround of Emerging Businesses in a Multinational Process Technology Company


Turnaround of Leading Retailer Amidst Shareholder Turmoil


Restructure of Media Company


Troubled Regional Manufacturing Company


Assessment & Recommendations for Unsecured Creditors of Paper Manufacturer Post-Chapter 11

Restructuring of a Public Franchise Business


Consolidation and New Alliance in a Consumer Product Business


Distributor of Paper and Printing Supplies Restructures its Entire Business Concept


Large Mid-Western Nonprofit Organization in Financial Turmoil

A well-known nonprofit organization was overextended in terms of its programs, infrastructure, talent, and finances. Employees contemplated the lack of leadership and vision. Accounting data of individual programs and locations were convoluted and incomplete, collections of receivables neglected, and the real extent of the financial deterioration unknown. The widening operating deficit alarmed the Board and had the recently hired CEO turn to an experienced turnaround consultant and change agent.

Norelli analyzed the financial data and revealed the actual financial performance by program and location. Short-term cash improvement and cost reduction plans were developed and implemented. Norelli assisted the CEO in communicating with his Board and staff and identifying a new CFO. Norelli’s organizational and strategic assessment served as the foundation for the organization’s strategic planning process.

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Metropolitan Nonprofit Organization Needing New Focus

A well-established nonprofit organization had lost focus in its programs and services. The lack of common goals of the Organization’s different districts and financial accountability of program and district managers had led to a negative operating performance. The Board of Directors had been avoiding making the hard decisions necessary to stop the financial drain and re-focus the Organization’s resources and efforts. The new Executive Director asked Norelli & Company to develop a compelling Strategic Plan to unify the organization and to make recommendations for closing the operating deficit.

Norelli selected a diverse Strategic Planning Task Force in consultation with the Executive Director and Board President. Working alongside the Task Force and the Board, Norelli developed a detailed Strategic Plan document providing all districts with a common set of strategic goals. After a thorough analysis of the Organization’s financial records, Norelli was quickly able to develop specific recommendations for expense reductions to balance the Organization’s budget without effecting mission-critical programs. The momentum created through the strategic planning process mobilized the whole organization.

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Restructuring of Leading Manufacturer of Specialty Packaging Machinery

A well-known manufacturer and marketer of specialty packaging machinery to the beverage and food industries was losing money. Retained by the new CEO, Norelli conducted a technology audit, evaluated the sales organization, and spent one month personally interviewing key customers in the U.S. and Canada. In addition, Norelli interviewed sales managers, engineers, manufacturing supervisors and other trade sources. Norelliís financial analysis revealed for the first time the actual profitability of the companyís individual product lines and industry segments.

Based on Norelliís recommendations, the company divested/ spun off two marginal product lines, restructured the national sales force (eliminating one layer), hired a new VP of Marketing, and re-focused its R&D efforts. The business returned to profitability within a year.

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Turnaround of an LBO

A converting division of a large integrated paper company, specializing in niche consumer products, was performing poorly following a management buy-out. In the role of industry expert, Norelli was part of an investigative team retained by the senior lender. Norelliís comprehensive assessment of the organization and its market environment indicated that the companyís operating talent, converting technology, product line, and competitive positioning were adequate to succeed in the market place, but the large, non-value adding overhead structure created through the buy-out was driving the poor results and deteriorating morale. As a result the lender was able to exert leverage for substantial organizational change as well as divestment of an antiquated paper-making facility.

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Strategic Repositioning of School and Art Supplies Manufacturer

A well-regarded manufacturer was spread thinly across three end-use segments with inconsistent profitability despite impressive sales growth. With Norelliís help, unprofitable customers were addressed, manufacturing of commodity loss-leader products were out-sourced and inventory dramatically reduced, and the internal product development and design skills needed to expand the line of proprietary and licensed products were upgraded. The sales force was reorganized, with more focus on category-leading customers committed to a complete product mix including the specialty items. One mature industry segment was de-emphasized and another sold. Profitability and return on assets improved.

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Spin-Off and Turnaround of Emerging Businesses in a Multinational Process Technology Company

This private specialized technology company was suffering from too many new business initiatives, inadequate market analysis and fragmented R&D, capital investment overruns resulting in a large ďair-ball,Ē unstable liquidity and fragile relationships with key process industry customers in its core operations. The company was in Special Assets due to multiple covenant violations when Norelli was hired. After independently assessing the market opportunities, Norelli recommended focus on only two while spinning them off from main operations; strengthening and restructuring management, and forming relationship teams within sales coupled with a new incentive plan. The Board listened, and ultimately was able to complete a very favorable sale to an international strategic buyer.

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Turnaround of Leading Retailer Amidst Shareholder Turmoil

A large family-owned retail business was struggling amidst an industry consolidation. An abrupt and unplanned transition to the third generation, a dysfunctional senior management, inept family members in executive positions, and non-working family members draining financial resources further contributed to the companyís becoming the largest problem loan in its state for the senior lender. The company had been under covenant defaults and put into Special Assets when Norelli was hired on behest of the bank. Behind the scene dissident minority shareholders were considering litigation.

Norelliís analysis of the three most significant business units made the Board realize for the first time that two of them were unprofitable. Norelli was able to unify the Board to take the actions needed to preserve the company while avoiding a destructive shareholder fight. A new business model and corporate governance structure was implemented, backward integration efforts were eliminated, and a new outside CEO recruited. Debt was successfully refinanced with the existing lender paid in full. The company returned to profitability while larger competitors failed.

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Restructure of Media Company

A fully integrated newsletter publishing company was experiencing competitive pressure from internet-based competitors and the technological changes affecting the printing market. Norelli assessed the companyís product line, cost structure, and staffing and made recommendations for changes. The business returned to profitability after implementing Norelliís recommendations.

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Troubled Regional Manufacturing Company

This struggling undercapitalized mid-tier flexible packaging company (a private company) served well-known customers in certain packaged food segments, but was losing money and organizationally dysfunctional. Asked to assume a hands-on role, Norelli stabilized the short-term situation by focusing on cash, improving lender communications, reducing overhead, negotiating new terms with key suppliers, restructuring sales compensation and focusing the management team on specific goals. Profitability was restored. A strategic planning process was undertaken during which fundamental disagreements emerged regarding the steps necessary to ensure long-term sustainability. With the ownership unwilling to sell a marginal West Coast facility and make other strategic and management changes, Norelli resigned the engagement. The company failed within three years.

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Assessment & Recommendations for Unsecured Creditors of Paper Manufacturer Post-Chapter 11

The Unsecured Creditors Committee engaged Norelli to assess the company post-confirmation, determine why it was under-performing, make recommendations to the Committee, and testify as an expert witness. Norelli uncovered and documented the Companyís failure to comply with commitments implied in the approved plan. The judge approved motions based on Norelliís recommendations and testimony, which resulted in a significantly enhanced recovery for the unsecured creditors.

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Restructuring of a Public Franchise Business

After a period of rapid domestic and international growth, this publicly-held franchise operation was losing money once again. Norelli was hired by high-profile outside directors though management fiercely objected. Tensions were also high between the company and its institutional creditors and single largest trade supplier. Norelli conducted customer focus groups and confidential interviews with host retailers and employees. Norelliís strategic assessment led it to the conclusion that managementís strategy was doomed to fail. The Board asked Norelli to become the interim CEO to restructure management and oversee a new turnaround plan. Cash flow improved dramatically, bankruptcy was averted, shareholders unanimously approved the infusion of new equity, and the company returned to profitability by its fourth quarter. The company remained profitable for its entire first Fiscal Year following Norelliís engagement, and the banks were paid in full. It turned out that the best days of the company were still ahead.

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Consolidation and New Alliance in a Consumer Product Business

A young business in a growing consumer-product market was struggling with integration of operations on both coasts. Norelli uncovered substantial management, accounting, and systems deficiencies, and at shareholder request, became the interim CEO. Finances were restructured, talent enhanced, and one operation was closed. The company refocused, successfully forming a new joint venture with a key supplier on the West Coast.

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Distributor of Paper and Printing Supplies Restructures its Entire Business Concept

This second-generation family business and leading multi-state distributor of packaging and printing supplies required a comprehensive strategic and organizational assessment, with specific focus on upper management talent. In a ten-month stint as interim COO, Norelli acted to ensure a swift analysis and subsequent implementation of the proposed action steps. The entire business was restructured from a geographic to a Strategic Business Unit concept and significant cost synergies were realized. A new incentive plan for the reorganized sales force was put in place resulting in a substantial reduction of total sales compensation while providing additional rewards for top performers. Norelliís restructuring concept helped enhance shareholder value and made possible the transfer of the business to the third generation.

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Revitalizing Healthy Organizations

Resolving Troubled Situations

Managing Transitions
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