Case Study
Asking the Tough Questions to Resolve $200K+ in Debt
Retailer that fell on hard times after lock-down ended faced mounting debt.
The Problem
NCS has a large Enterprise client with a customer base that spans the world. One of their retail clients saw a surge in sales during the COVID-19 pandemic by catering to consumers who enjoyed their products while being quarantined at home. Unfortunately, like many online retailers, once lockdown ended they fell on hard times. The retailer owed our client more than $200,000 in debt.
Thorough Analysis to Assess Debtor's Financial Status
NCS worked with the debtor to secure an audit from one of the top #5 accounting firms in the world. By conducting a thorough analysis of the debtor's financials, the team was able to understand if the proposed settlement was equitable.
Strategic Communication to Manage Client’s Needs and Debtor’s Challenges
The team at NCS leveraged their 20+ years of experience to work directly with the debtor's CEO to communicate the needs and achieve transparency between the two parties.
Timing is Key - When to Quickly & Efficiently Settle
The debtor was facing $40 Million in debt from creditors; NCS had to efficiently settle the debt before the money dried up and the client was left without an equitable solution.
The Solution
The same day that NCS received the claim from the client, a formal demand for payment was made in full to the debtor. In response, they graciously requested a meeting to discuss the available options for an amicable settlement. During the meeting with the debtor’s CEO, a dire financial picture was shared that included the business owing over $40 Million to secured creditors. This is why they initially offered only a 5% settlement, and after meeting with NCS they were now offering 15%.
After going back to the client with the new offer, they were understandably not pleased given the size of the ticket. They said they would consider it but needed a stakeholder’s support before making a decision. At this point, NCS stepped in to ensure that an equitable solution was reached. Since what is equitable can be subjective to each party, several factors had to be considered. Most importantly, it needed to be assessed whether the debtor’s claims were true about their financial health. If they turned out to be, it would be imperative to settle as quickly as possible to ensure that the client received the biggest bite of the apple before the money dried up.
To achieve peace of mind and transparency for the client, the team at NCS went back to the debtor to request they factually support their financial position. To their credit, they produced a recent audit from a top #5 accounting firm that validated their grim financial outlook. The data, report, and information was relayed back to the client so they could make an informed decision. By doing our due diligence, asking the tough questions, and taking the path of least resistance, NCS was able to achieve an equitable outcome.