Corruption

Reorganisation and sale

Mismanagement and corruption on the part of the CEO caused a textile retailer, as the largest subsidiary of a diversified group, to end up in an acute crisis situation. Ralf Schmitz was assigned control of the company in order to save the group and safeguard many jobs that were under threat.

Project overview

Team

Ralf Schmitz

Client

Board of the group / parent company

Company
  • Textile retailer, largest subsidiary of the diversified group
  • Sales of > EUR 0.6 billion
  • Company covering DACH and Eastern Europe with approx. 11,000 employees
  • Legal form: limited liability company
Initial situation
  • Crisis due to mismanagement and corruption on the part of the CEO
  • Risk posed to the entire (parent) corporation as a result of financial obligations entered into
  • Loss of all jobs
What the project involved
  • Taking over the management of the company / CRO
  • Continuing the business activity during the crisis by working together with the management team
  • Restructuring the company with subsequent sale
  • Minimising the risk for the (parent) company
Measures
  • Close communication and cooperation with the management, business partners and shareholders
  • Reducing the level of uncertainty in the corporate organisation and workforce
  • Securing transparency and proper business practices by establishing new control mechanisms
  • Ensuring liquidity by taking appropriate measures within the company (e.g. strict inventory management)
  • Safeguarding the supply chain by working together with trade credit insurers
  • Negotiating with the banks involved
  • Negotiating a redundancy scheme and reconciling different interests
  • Implementing an M&A process
  • Cooperating with the public prosecutor’s office and tax inspector
Result
  • Continuation of business activity without any slump in sales
  • Successful sale of the company to financial investors
  • Releasing the selling corporation from liability
Project duration

Approx. 8 months