Blimpie International, Inc. operates 1,300 fast food franchisees through the Blimpie franchise system and 26 corporate-owned stores within WalMart stores, generating annual revenue of approximately $220 million. Blimpie experienced severe cash flow problems and was in litigation with its own area representatives, strategic contractors and vendors. This severely impacted opening new franchise and corporate stores, and Blimpie defaulted on its bank loans.
Getzler Henrich (“GH”) was initially engaged by the company to ascertain management strengths, identify operational problems, advise on the necessity to file Chapter 11 and how best to deal with the litigation. After our initial assessment, the firmwas appointed Interim CEO to guide the company through a successful sale as well as to formulate a turnaround plan in the event of the sale falling through. This included ascertaining new cash needs and the merits of filing Chapter 11 versus a formal composition agreement.
As Interim CEO, we oversaw operations, managed cash flow and negotiated with major vendors for continued supply against the backdrop of severely restricted availability of funds and the multiple pending lawsuits against the company. GH managed to freeze the old debt during the due diligence phase by the potential buyer and secured continued supply from the critical vendors and contractors.
GH successfully completed the sale of Blimpie. Furthermore, the secured lender received 100% of its loan plus interest, the investors received a respectable ROI and the unsecured debt was assumed by the buyer.
Blimpie International
