So let me get this straight, you had no prior knowledge of the bankruptcy filings or the possibility of it? You were told in October out of the blue about the filing?
Slightly off topic but I really want to know, why would you bring in PE in the first place? losing all control of your company sounds pretty sh***y if you ask me. Maybe I just don't know enough about PE but it seems like every deal I've heard about with PE is awful.
Good questions. Let me do my best to respond.
So let me get this straight, you had no prior knowledge of the bankruptcy filings or the possibility of it?
- During a board meeting in the first week of Aug, the bankruptcy attorney was introduced to me by the PE firm. From then until end of Aug when I went hunting, I recall there was a concern about a potential bankruptcy, but all of the strategy, effort, and focus that I was a part of or heard reported by the CEO to the board was in working on making payoff arrangements with the "non-go-forward" brands (those brands who were not going to be sold on BO in 2026), increase sales, factory orders and deposits made for the 2026 BlackOvis products, negotiations with the bank, and getting the outside equity cure investment to keep the company rolling into 2026 and beyond.
You were told in October out of the blue about the filing?
- Everything seemed to be trending in the right direction with bank negotiations, equity cure coming together, sales in Q3 were super solid, and cash flow forecast models to pay debts for non-go-forward brands during 2026 were coming together. One week before the filing, on Oct 13, was the first that it was shared with my by the PE team that bankruptcy was likely if the bank negotiations didn't result in favorable results.
Why would you bring in PE in the first place?
- My business partner needed/wanted to be out of the business for reasons related to his family and himself. In the end, I helped him get what he needed/wanted. Initially I had hoped to "de-risk" by taking some chips off the table, but when it came down to it the details of the deal didn't leave room for me to take any meaningful amount of my ownership out of the business. I didn't feel that I needed to cash out, and loved being in the business. As I mention in episode 2 of the podcast "The Price of Private Equity", when the PE firm parted ways/pushed out 1 of the 3 primary partners. He was a friend, the main reason we agreed to the deal, and likely the one individual in the PE firm that valued friendship more than business.. This made the relationship pure business vs friends in business. I could be wrong, but this is how I perceived it transforming the situation.
Hope this helps clarify. It's a good lesson to anyone else to reconsider the types of investment or other business partners in any venture.
