Word: von
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...With Von Lehman installed, the bank agreed to extend the loan to the end of March. That still didn't leave Good much time. "We needed to find a lender with a lot to gain," she explains. "That meant either a high-risk lender at 16% to 17% or a lender who would get more than interest." By the end of March she had finalized a short-term factoring deal with CIT, agreeing to pay 200 basis points above prime and 0.75% of Barry's receivables...
...Von Lehman's next problem was to keep the Mexican plants running through May to produce the goods for Christmas but at the same time plan to shut them down. But workers got suspicious when the company stopped ordering raw materials. They had seen other U.S. companies close overnight without paying the legally mandated severance pay. Two days before the planned but unannounced shutdown, workers at one plant took the American manager hostage, locking her in the lunchroom until they were assured of severance. The next day Von Lehman sent a pile of cash in an armored truck. Amazingly...
Barry also had a warehouse it needed to keep operational for two months in order to supply major clients at Christmas. These workers staged a walkout, refusing to ship until the company posted a bond for their severance. "If we didn't supply our core customers that year," Von Lehman says, "we were toast." The company posted the bond with a Mexican lawyer, who scammed half the money. Another truckload of cash had to be sent...
...Von Lehman managed the company through mid-2006, its condition was gradually upgraded. In June 2004 it was kicked off the New York Stock Exchange, but it broke even on an operating basis and began 2005 with zero debt, having paid off the loan from CIT. By December, the company's stock was listed on the American Stock Exchange. Using exclusively Chinese manufacturing, Barry raised profit margins and completed the turnaround without losing core customers--most important, Wal-Mart. In 2005, the company made $8 million. By the time Von Lehman left in May 2006, the stock was trading...
...funny thing happened to Good and Von Lehman: almost nothing. Good has been hired by a midwestern bank to find $40 million "missing" from a $110 million telecommunications company in receivership. But the oceans of capital at private-equity funds mean that companies once left for near dead, like Barry, have more options. In this flush economy, Von Lehman says, "hedge funds just lend these troubled companies money, but they don't fix them. We don't know when that bubble's gonna burst, but they're gonna need us someday." They always...