Summer 2012 • Issue 44, page 12

Robert C. Greeley - Marketing Skills and Baseball Perspectives for a Successful Receivership

By Greeley, Robert*

Bob Greeley describes his Sacramento distress management consulting boutique as follows: “I don’t create the train wreck. I put the engine back on the track, rescue survivors, and salvage the pieces.” Greeley, Lindsay Consulting Group is Bob and four consultants who assist distressed companies by managing the restructure, sale or liquidation of the business.

Bob notes that most engagements today are liquidation or sale because the economy is not growing. “Equity Receiverships and turnaround management are both like being behind in the ninth inning of a baseball game - every time at bat you need to get on base--hits or walks. If everybody gets a hit or a walk--eventually you win. Any one player doing too little or failing by trying to do too much, makes it harder. You play until you win--or you lose and go home.”

Greeley is a finance professional that differentiates his work with a heavy emphasis on marketing. “The best business plans are about marketing. Think about it. In a distressed business, if it is a viable company, we will be marketing their products. If the combined business is not viable, we will sell the viable pieces. And if nothing is viable, we will be selling the assets and intangibles. It is all about marketing and positioning for a sale and then making it happen. We can all do cash forecasts, but doing the marketing that generates the cash to make the forecast real–that’s hard work.”

Bob worked 13 years for Wells Fargo Bank and led a commercial loan team before starting his business in 1983. That same year he augmented his undergraduate finance degree with an MBA from Golden Gate University–where he later taught as an adjunct finance professor for 18 years.

In further discussing his philosophy about his business, Bob believes that not all businesses can or should be saved. “The receiver stands in the middle of a conflict and works for the judge. I see my job as maintaining the assets and improving value, because if assets are not increasing in value, then the value is decreasing. Value is seldom static. The tools available to a receiver are limited, and there is no place for entrepreneurial risk. So for me to add significant value in a receivership, there needs to be a business problem to be addressed, a plan to implement, the parties have to understand the value to be obtained, and we all have to cooperate and explain it to the judge who is the person directing the receiver’s actions and scope of authority.”

Bob believes that the receiver needs to build as much cooperation as is possible while respecting the adversary positions. When there is conflict, everyone loses. Bob finds that, often by the end of the day in his receiverships, the defendant is cooperating, because increasing value is in the defendant’s best interest.

Bob has completed condo and residential construction projects, leased up shopping centers, sold cattle, sold HVAC manufacturers, and restructured financing for a health food pill distributors–all in receivership. He notes that, while they can do rents and profits engagements, they are much better suited to operating a business where there is serious business problem and a value in the continued operation.

There is a sign in Bob’s office that reads, “Respect your adversary–They are the ones who give purpose to your toil.” On that point, Bob states, “I have been blessed with great counsel over the years which have included Steve Felderstein, Judge Jane McKeag, Judge Whitney Rimel, Judge Bob Bardwil, Don Fitzgerald, Mark Serlin, and Bob Mirkin. Each has taught me more about the receiver’s role, the law, and a great deal about patience, preparation, legal positioning, and building constituencies.”

Bob’s first major receivership was in 1991. By stipulation, he was appointed to operate a wholesale nursery employing more than 600 people at sites in Oregon and California. Bob generated cash from operations while he ran the nursery for nine months before liquidating the California site and selling the Oregon site as a going concern. Due to Oregon’s strict land laws and the nursery’s two separate major revenue streams, the Oregon operations were sold to two separate entities which formed a joint venture to buy the land. Key to that transaction was that the land was owned by the insolvent nursery’s two principals. Their agreement for the sale was accomplished after Bob negotiated the bank’s release of their personal guaranty subject to closing the sale.

Recently Bob was receiver in a case involving a metal fabrication and construction company that was building food processing plants all over California, rebuilding the diesel snow-blowers for the S-P railroad, and making huge lights for a new bridge in Redding. Insolvent, the firm suffered from ill-conceived investments, but was known for its quality products and on-time delivery. Shutting down would have defaulted huge contracts and forgone millions in retentions. Going forward required the bank to lend money to the insolvent debtor. As a receiver and old banker, Bob structured a weekly cash forecast and reporting system to justify a working capital line of credit. With the receiver’s certificate line in place, he negotiated a week-to-week standstill agreement with the two unions that controlled the 35 to 40 on-site workers and then convinced the bank to allow collections to be used in the operations similar to a cash collateral agreement. With the owner and foremen, the receiver then rescheduled projects to minimize cash requirements.

Luck and cooperation allowed the receivership to self-fund completion of the 23 contracts without borrowing. The owner agreed to a sale of its equipment and to a new operator, which issue Judge Shelleyanne Chang graciously heard on shortened notice in a courtroom filled with constituents and parties in interest. She even took testimony to have a complete record so a sale order could be entered that day. Now, two years later, Bob reports that all contracts were completed, over 90% of the contract receivables and retentions were collected, the bank received the entire principal of its loan (over $2.5 million), the owner’s guaranty was released, 33 of the 35 employees now work for the new business, as does the former owner. Bob says, “The credit for that turnaround goes to the judge who took the extra time to listen and understand the business time constraints, the buyers, the seller, the workers, bankers and customers who all provided the flexibility and cooperation to pull a turnaround out of an insolvent train wreck.”

Bob likes baseball analogies and loves to play softball in what he affectionately refers to as “The Old Men’s League.” Their Rotary team has won more than its share of league championships and Bob, in typical receiver style, is the team’s catcher. “I love a play at the plate or to win in the last inning.” (Don’t ask him about his homerun in a fast pitch softball game on his 41st birthday unless you have an hour and love softball).

Bob and Celeste, his wife of 32 years, live in Carmichael, California. Celeste is active in an Order of Discalced Carmelites. She recently received recognition from the Royal School of Needlework when her needlework was exhibited at Hampton Court in London as an example of the work done at the RSN’s San Francisco Certificate Program.

Bob has been writing creatively since high school. After losing a hotly contested manufacturing turnaround position to a respected competitor, Bob wrote the poem, “Mount the Galloping Horse” depicting the emotions of the initial interviews or Beauty Contests that are the first step in getting a turnaround management assignment.

Bob is a member of the California Receiver’s Forum State and Sacramento Boards and has served on the local and State Boards of both the Bankruptcy Forum and the California Receivers Forum. He has chaired or spoken at numerous events on receivership, insolvency, and credit. Bob is a member of the Board of Directors of the Northern California Turnaround Management Association and the Risk Managers Association of Sacramento in addition to holding memberships in various other business and professional organizations.