March 12, 2025

As lifelong Angelenos, Karen and I may never come to terms with the devastation caused by the Palisades and Eaton fires. We know too many who lost their homes. While recovery will be a long journey, we are confident that these special communities will endure.

Coincidentally, the following eblast was drafted before the fires occurred, to help those affected by Hurricanes Helene and Milton. Please don’ t hesitate to reach out if our experience may help you address available options.

All my best,

Jeff

B&A’s recent engagements reflect the trifecta of challenges facing companies nationwide: the continuing distressed economy; an ongoing COVID-19 hangover; and acute weather-related disruptions including fires, hurricanes, tornadoes, and associated flooding.

Creditors, equity investors, business owners, and other stakeholders are contacting us for help. Our solutions span forensic accounting engagements to assignments for the benefit of creditors (ABCs), bankruptcy, receiverships, and more. Here are a couple of recent matters.

Recovering from the devastation caused by the Palisades and Eaton Fires and Hurricanes Helene and Milton will take years. We sincerely hope business interruption insurance will cover most companies’ needs. However, in our experience, insurers often fail to provide timely, complete reimbursements.

In one such case, a decades-old textile company was on an upward trajectory after a corporate restructuring when a hurricane ripped off a large portion of its plant’s roof and flooding destroyed machinery, equipment and inventory. Management quickly put a plan in place and filed an insurance claim. However, the insurer’s continual delays in processing and funding the claims forced the company to raise private capital and compromised the turnaround plan.

Nearly a year after the hurricane, the insurer had only made partial payments on certain claims and $0 on others, and the replacement roof remained incomplete. Ultimately, the company could not fulfill orders and lost its largest clients. The owners’ only option was to close the plant, resulting in 150 lost jobs.

Litigation

The company pursued a $3.2MM Business Interruption claim and $2.2MM Extended Business Interruption claim against its insurer and engaged B&A to file and negotiate the claims on its behalf.

The insurer rejected the claims, purportedly because the company was not profitable at the time of the hurricane, and would not negotiate amicably, so litigation ensued. 

The matter settled favorably for our client just before its trial date.

The owner of a multi-chain restaurant in the Pacific Northwest was experiencing a downturn in sales and profitability from lingering effects of the COVID-19 pandemic, competition, and fewer patrons. The corporate structure enabled the owner to pursue a two-pronged approach to realign the business:

1. Shutter non-performing stores; then
2. Pursue a Chapter 11 reorganization for a subset of stores and an assignment for benefit of creditors (ABC) tor the rest.

B&A initially was engaged as financial advisor to assist with the following:

1. Preparation of 13-week cash flows for the two restructuring paths; and
2. Analyze the holding company’s management fee structure to assess collectability of reimbursable expenses.

Subsequently, B&A was retained to serve as the company’s interim CFO. The plan of reorganization under Chapter 11 and ABC have been filed and the turnaround process is underway.