RICHMAN GORDMAN DEPARTMENT STORES

Case Highlights

• Developed Chapter 11 plan of reorganization with company
• Obtained plan confirmation with management and equity in place

Case Narrative

Richman Gordman operated 30 department stores in the Midwest, generating revenues in excess of $240 million, but was unprofitable and having difficulty renegotiating its bank debt and obtaining trade credit.

As business consultant to the company, DSI assisted in the preparation, review, and implementation of an overall business plan that included providing the following services: (1) analyzing and implementing a reasonable and efficient operating and overhead cost structure; (2) reviewing and analyzing real and personal property leases; (3) re-negotiating cumbersome leases; (4) reviewing and analyzing store operations to determine profitable store base; (5) closing unprofitable stores based on analysis; and (6) assisting management in discussions and negotiations with secured and unsecured creditors.  DSI negotiated with several lenders to provide a DIP facility to the company.  DSI participated in the development of the Chapter 11 plan of reorganization including exit financing with a new lender.  Ownership and management responsibilities remained with the original equity holders.