BRANDLIN AND ASSOCIATES

INSOLVENCY AND REORGANIZATION SERVICES CASE STUDIES

Clients:	Senior Lender Agent Three Primary Participants
Company:	Paper Converter & Manufacturer
Revenue:	$550,000,000
Loan Size:	$150,000,000

Detailed and documented fraudulent sales submitted to lender totaling $18,284,000.
Accumulated back-up documentation supporting fraudulent "bill and hold" sales totaling $28,500,000.
Gathered supporting documentation regarding "refreshing" or "ever-greening" of invoices totaling $8,100,000.
Discovered over-valuation of finished goods inventory of $30,000,000.
Analyzed 53 bank accounts over 3 months for preference payments, sources of deposits, and other unusual transactions.
Established cash controls and cash operating projection system.

Client:	Equity Sponsor
Company:	Manufacturer and Marketer of Polypropylene Storage Products
Revenue:	$43,000,000
Equity Investment:	$40,000,000
Loan Size:	$48,900,000

Identified fraudulent reporting and methodology used to prepare false interim financial statements.
Prepared YTD financial statements to reflect accurate balances, cashflows, and operating results.
Adjusted EBITDA from a positive $7,000,000 to a negative $2,000,000.
Identified an additional $1,500,000 under-reserve in accounts receivable and inventory.
Calculated an additional accounts receivable reserve need of $500,000.

Clients:	Senior Lender Agent Two Participants
Company:	International Consumer Products Distributor
Revenue:	$200,000,000
Loan Size:	$70,000,000

Designed, installed, and monitored cash management systems and procedures.
Evaluated company's weekly cash receipts, disbursements and funding requirements for lending group.
Prepared detailed balance sheet, P&L, and cashflow projections for the forthcoming fiscal year.
Established 13-week cash forecasting system and integrated with detailed projections.
Prepared profitability analysis of major customers.
Represented lenders and monitored Chapter 7 liquidation.

Clients:	Senior Lender Agent Bank & Three Participants
Company:	Food Manufacturer and Distributor
Revenue:	$250,000,000
Loan Size:	$50,000,000

Analyzed management's adjustment of $46 million of the total $58 million of accounts receivable presented in borrower's borrowing base certificate.
Evaluated sales documentation and related evidence to determine validity and ability to collect the $46 million of adjusted accounts receivable balances.
Analyzed management's adjustment of $12 million of the total $26 million of inventory presented in borrower's borrowing base certificate.
Identified over $1,000,000 of invoices which were "refreshed" by management in order to increase its borrowing base certificate.
Developed daily cash, accounts receivable and inventory roll-forward procedures and controls to establish integrity of daily collateral reports.
Established daily controls to monitor inventory movement, sales, and collections including a 13-week cash flow forecasting system maintained by management and monitored by B&A.

Client:	Senior Lender
Company:	Textile and Clothing Importer
Revenue:	$80,000,000
Loan Size:	$25,000,000

Reconciled borrowing base certificate schedules submitted to lender with Company's computer generated reports and identified various techniques used by borrower to overstate both accounts receivable ($11,000,000) and inventory ($5,000,000).
Uncovered diversion of funds of approximately $7,000,000.
Identified "off book" bank accounts.
Identified over $1,000,000 of invoices which were "refreshed" by management in order to increase its borrowing base certificate.
Analyzed bank accounts for preference payments, sources of deposits, and other unusual transactions.
Analyzed financial statements, data and subsequent transactions to compile amounts owed from related parties.
Documented affiliate activities.
Evaluated appropriate inventory records to determine correct valuation.