Situation & Problems: In March 1991, Wells Aluminum sold one of its customers, Kero Company, an unusually large volume of aluminum extrusions. Before Wells could obtain payment for the extrusions, Kero filed Chapter 11 Bankruptcy in May 1991. Wells Aluminum was owned by Gibbons, Green, van Amerongen – the New York Leveraged Buy-Out Firm. Wells’ subordinated bonds were in work-out at Wells Fargo Bank…
Conclusions:
» Sales could be increased in the swimming pool business. The product was competitively priced. Quality was equal to or better than competition Sales were limited to the mid-west and mid-atlantic states, and distribution could be expanded to other geographic areas. The product line was not complete, and could be extended without a large capital investment.
» The money losing office products line should be shut down. The line was not competitive in price, quality or features. The capital investment needed to improve it would have a negative return…
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