Family / Closely Held

Family / Closely Held Situations

Closely held investments, particularly Family controlled operations, often present unusual challenges and require specialized assistance.  Kestrel’s principals and managing directors have had extensive experience and success dealing in these highly charged environments where emotion, ego and non-financial goals are sometimes as important as operating performance.  We provide:

  • in depth experience with family company investment challenges
  • discreet resolution of stressed family operating investments with careful consideration of the internal culture and sensitivities of the constituents
  • independent assessment of private company performance (financial, management, governance, and commercial) to measure continuing performance of healthy companies and troubled investments.
  • reduction of fiduciary risk to limit legal exposure of trustees, involved family members, family office professionals and others.
  • interim management to bridge family companies through troubled circumstances
  • guidance in evaluating exit and management succession strategies
  • assistance in defusing cross-generational conflicts

Selected Examples
Closely Held / Family Controlled Assignments  

Privately Owned Waste Management Facility  

  • Retained to assess commercial value of family investment in a $20 million waste facility and develop exit strategy.
  • Identified deficiencies in financial and environmental controls, and substantive related contingent liabilities. Assumed role of Interim CEO, restructured and reduced secured lender’s debt; sold plant to 3rd party and effected an orderly and discreet out of court wind-down while avoiding contingent obligations.  

Design/Distribution Men’s Accessories  

  • Engaged by management to budget, plan and prepare for a bankruptcy filing in response to deteriorating relationship between management and secured lenders.
  • Quickly identified basis of conflicts between parties. Stabilized lender relationship, identified short list of critical conflicts and actionable responses. Facilitated a short-term forbearance agreement with Senior Lender, out of court settlement of long term lease obligations, overhead reductions to achieve renewed profitability, and a long term debt refinancing.  

Private Construction Company  

  • Engaged to review current financial condition and forecasts in preparation for commercial bank debt restructuring of $300 million private civil contractor;
  • Established cash flow forecasting model and enhanced budgeting format. Created financial review for company’s present bankers and prospective lenders and assisted with debt restructuring negotiations.   

Ethnic Hair Care Products Manufacturer  

  • During sudden change in family management; provided Interim/CFO, VP-Operations and Controller to support newly appointed CEO. Managed cash flow crisis and a major organizational and operational restructuring.
  • Major performance turnaround was achieved in domestic operations with subsidiaries in South Africa, Jamaica and Brazil also returning to positive cash flow. The highly profitable business was later sold at an attractive price as an exit strategy for owners.   

Family Owned Investment Company

  • Retained to assess status of $30 million investment in distressed private holding company. Client had been unable to profitably market its proprietary technology and had sold its patents and royalty streams to 3rd party.
  • Assumed position of CEO and engineered an orderly out of court liquidation and wind-up of company including the resolution of contentious litigation.  

Mexican Packaging Manufacturer  

  • In response to liquidity crisis in family owned multi-plant business, retained to develop and install cash flow and inventory management systems, improve purchasing practices and recommend organizational restructuring.
  • Cash-flow was dramatically improved, debt was restructured and, later, major asset sales provided company with a large residual equity for shareholders.  

Privately Held Consumer Product Company  

  • Advised minority shareholders owning approximately 30% of family owned $3 billion leading brand name company seeking to maintain family ownership;
  • Provided advice and recommendations re: financing alternatives, family governance issues and strategies for acquiring control. 

Geotechnical and Environmental Engineering Consultants  

  • Retained by the debtor to provide Interim CFO, improve cash-flow management, and develop organizational and operational restructuring after aggressive expansion into construction and petroleum ventures.
  • Restructured operations to liquidate loss businesses and sell high growth waste management contracts which were distinct from the company’s stable core consulting engineering operations. All creditors were paid in full with shareholders retaining substantial residual equity.  

Trucking Industry Services Company  

  • Advised a market leading family owned US trucking industry services company in establishing and implementing a successful international development strategy.
  • Reviewed the potential for entering the European market; selected appropriate country for entry and established business approach — including financial, logistics, market, and personnel plans. provided hands-on management assistance for successful start up. Prepared marketing plan for subsequent entry into Mexican market.