Alpha Omega

Restructuring Advisory/Chief Restructuring Officer Services

In early November 2007, Consensus was asked by the owner and outside financial advisor of Alpha Omega, one of Boston’s best known luxury jewelers, to raise new capital in a very compressed timeframe. Alpha Omega, a family-owned business, came to Consensus because of its unique experience in raising capital for distressed retail companies. Over the next forty days, Consensus conducted elemental due diligence and approached dozens of potential financing sources to explore interest in Alpha Omega. By the deadline, Consensus had produced a compelling term sheet from a well-regarded publicly traded company.

What happened next quickly became the subject of Boston and jewelry industry tabloid fare. In the midst of negotiating the term sheet, the family that owned the business abruptly fled to India. Shortly after their departure, outside financial management discovered that approximately one-third of the Company’s stated inventory was missing (or was otherwise unaccounted for). The lenders immediately sought and obtained a temporary restraining order to protect their collateral, the inventory, from further loss. As a result, the Company’s stores were closed and padlocked, and its employees were sent home indefinitely – all one week before Christmas.

The lenders agreed to re-open the stores and re-hire the employees subject to Consensus’s Michael O’Hara serving as Chief Restructuring Officer. Mr. O’Hara and others from Consensus worked with the Company’s other advisors, the lenders and Alpha Omega’s employees to secure and physically count every piece of inventory in the early morning hours over the weekend before Christmas. The stores thereafter opened, but the re-openings were not without their problems: employees were angry, confused and nervous; customers were concerned about their orders; others worried about their deposits. Indeed, several prospective grooms fretted over engagement rings expected for Christmas Eve proposals.

Consensus personnel worked with other professionals and the Company’s employees to solve these problems, and to position the Company for sale quickly (before further value eroded) in bankruptcy. Working over the New Year’s holiday, the Company filed for Chapter 11 on January 2, 2008 and set January 22 as the date for a bankruptcy sale auction. Consensus thereafter re-connected with the 40 parties we originally reached out to acquire the company, plus an additional 50 parties. Consensus set up an electronic database using the Company’s website and led a significant number of due diligence reviews with prospective buyers. Ultimately, Alpha Omega was sold to a joint venture comprised of Tiger Capital, Gordon & Co. and SB Capital, a group of inventory liquidators. Two of the Company’s main stores were assumed by major jewelry retailer, Ross-Simons, Inc. Consensus personnel managed the subsequent inventory and purchase price reconciliations between the Company’s lenders and the purchasers.