Examples of Our Work [Business Valuation]

Super‘market’ Conditions

Economic and market conditions contributed to this company’s downturn. They also helped it make its case.

Engagement
Gleason was retained by counsel for the officers and directors of a privately owned supermarket chain with hundreds of stores in several southern states. The company, which had been purchased several years before by a high-profile New York investment banking group and was operating under Chapter 11 protection, faced financial mismanagement charges from lenders and creditors. One of the issues was the company’s strategic acquisition of a compatible publicly traded supermarket chain, which had allegedly forced the already highly leveraged retailer into bankruptcy.

Gleason’s Role
Gleason was asked to determine why the business failed and when it became insolvent. We also conducted an analysis of some of the company’s accounting practices to uncover or refute concerns about possible improprieties that may have masked the failure. In addition, we studied the financial information disclosed by the company during both acquisition transactions as well as its integration plan for the second chain of stores. We also analyzed market and industry conditions, comparing the company to other publicly traded grocery retailers.

Results
An analysis of economic and market conditions showed that the company’s financial condition compared favorably to those of like publicly traded supermarket chains.

Our analysis of the accounting issues that were raised indicated no improprieties by the company.

A review of the transaction documents revealed that appropriate disclosure of the risks involved in the second acquisition was made to the interested parties.

As a result, counsel was able to use our analyses to assist in negotiation of a successful settlement before trial.