Case Number: 5-210-261, Year Published: 2010
HBS Number: KEL505
Liquidity Crisis, Turnaround Management, Consulting, Performance Improvement Plan, Restructure, Term Loan, Bank Loan, Senior Subordinated Notes, Senior Secured Credit, Contribution Margin, Raw Materials Prices, Plant Consolidation, Plant Closings, Covenant Breach, Unions, Merger Integration, Strategic Repositioning, Core Competence, Operational Improvements
The case discusses the operational, strategic, and financial turnaround at Solo Cup, a manufacturer of disposable dining wares. Solo Cup’s troubles were compounded by the acquisition of a larger rival, Sweetheart Company, which had its own problems and presented issues of merger integration that management could not solve. David Garfield, a managing director at turnaround consulting firm Alix Partners, must first recognize Solo Cup’s core competencies in order to determine the appropriate change in strategic course, strip out the assets that no longer support the operations necessary for that strategy, and monetize them in order to rationalize its balance sheet. This case teaches that a three-pronged approach will invariably produce greater results than any one-dimensional turnaround.
Students will learn turnaround techniques necessary to restructure a company operationally, strategically, and financially, and will learn how Alix Partners’ relentless focus on “letting data rule” allowed the firm to revive a faltering company.
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