Microwave Products of America (f/k/a: Litton Microwave)

Situation: Chapter 11 (failed leveraged buyout) – assets dissipating

Outcome: Stopped free-fall; restored viability; sold assets back to Litton Industries in full settlement of claims; settled secured claims at 100¢ and unsecured claims at 70¢; emerged debt free.

Role: TBG appointed DIP – CRO, CEO, CFO, COO – duration: 2 ½ years

State of Affairs: Private spin-off defaulted immediately; sought Chapter 11 protection; creditors claiming fraud, self-dealing; $1.5M monthly cash burn; no credit facility; no plan; Japanese and Korean competitors undercutting prices by 85%; creditors looking at zero-to-12¢ recovery – assets quickly dissipating.

Proximate Cause of Failure: Parent deemed business strategic non-fit and starved capital support; sold failing business facing fierce foreign competition to novice business group lacking proper capitalization and no substantive operating plan; management team was fleeing; no leadership; business in free-fall.


  1. Installed interim CRO, CEO, COO, CFO; assessed, streamlined & recruited new, seasoned senior management team.
    Result: Stabilized organization and provided leadership.
  2. Identified core competencies and viable core business.
  3. Developed, obtained creditor and court approval to immediately implement emergency plan to jettison consumer microwave segment (negative gross margins) and sell off large inventories.
    Result: Stopped negative cash flow - generated substantial cash.
  4. Consolidated and quickly downsized; renegotiated performance-based labor contract & changed work rules; defined and installed proper metrics to become dominant commercial microwave manufacturer.
    Result: Dramatically reduced breakeven and generated positive cash flow, yielding a sustainable core business.
  5. Negotiated and developed Plan of Reorganization to sell assets back to Litton Industries generating sufficient cash (along with cash from sell-off of consumer microwave inventory) to obtain approval, confirmation and emergence from bankruptcy.
    Result: Yielded 100¢ on the dollar for secured creditors and 70¢ for unsecured creditors.
  6. Developed successor management team

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