Restructuring Advisors

Global Liquidation Centers

Company: GLC Limited dba Global Liquidation Centers
Industry: Retail
Size: $80 M
Region: Mid-Atlantic & Southeast
Expertise: Financial Restructuring and Business Assessment

The Challenge

GLC Limited was a retailer selling discounted general merchandise. In addition to the discount operation the Company had two specialty stores. One selling general hardware products and the other a team sporting goods operation. Three years after formation, the Company sought outside investors to fund various operations. With assistance from other parties they raised $81 million from 107 different individuals. The repayment terms to their investors ranged from three to twelve months with interest rates ranging from 50 to 200%.

Jim Burritt, founder of Restructuring Advisors, LLC was engaged by an ad hoc committee of investors to perform a financial review and assessment of the business. This was requested after many of the investors had missed their promised interest and/or principal payments from the Company. As Burritt and his team were conducting the assessment they also found it necessary to perform forensic accounting services. These actions were required to determine who each of the investors were and how many dollars had been received from each of the individual investors. In addition there were significant questions surrounding how the money had been used and how much cash the Company and the executives still had in their possession.

Our Actions

For the most part, the Company had no policies or procedures in place and maintained very few records documenting their transactions. Their accounting system was missing specific details on bank accounts and the system entries which had been made were generally classified incorrectly.

Burritt and team worked with the investors and financial institutions to obtain all available documentation in support of the funds that flowed in and out of the Company. All purchases and expenditures were analyzed to ensure appropriate classification. As significant information was missing, it became necessary to completely re-build the three years of financial statements beginning when the Company sought outside investments.

The Results

The Restructuring Advisors team completed the business assessment along with the rebuilt financial statements to understand what happened to the Company. The assessment was able to accurately depict the history of transactions. During the process Burritt and his team learned that the owners and others had used investor money to fund lavish lifestyles, purchase other businesses and properties and subsequently place nearly all of their ill- gotten gains in their own name. The information from the work completed by Restructuring Advisors ultimately is being used to assist the Securities and Exchange Commission and the U.S. Attorney’s Office in filing charges against the officers of the Company.