Pangborn Corp. was acquired by Atlas Holdings LLC and needed a new CFO. WPI was engaged to provide interim CFO Services. In addition to serving as CFO, handling purchase accounting and the audit, WPI interviewed CFO candidates and after selection, trained the new CFO. Within 2 years the CFO was promoted to CEO at Pangborn. In addition to serving as CFO, other projects included Preparing the S-1 and MD&A and addressing the ongoing silicosis issue.
S-1 and MD&A – Pangborn was one of several companies that Atlas Holdings wanted to combine into a special investment vehicle and take public. Unfortunately the market for this type of investment dried-up and the public offering was cancelled.
Silicosis – Pangborn was named as a defendant in over 10,000 silicosis cases. The risk seemed ever present. Below is the summary of a WPI memo explaining the go-forward risk for silicosis lawsuits.
Regarding the silicosis claims, it has become significantly more difficult for plaintiffs to recovery since 2006. The marquis event for Pangborn and other silicosis defendants was the finding of Federal Judge Jack. Judge Jack is a Clinton appointed, whiskey drinking Federal judge, but Judge Jack is unique because she was formerly a registered nurse. The Texas judge blew the whistle on widespread silicosis fraud, exposing a ring of doctors and lawyers who drafted up phony litigation in an attempt to reap huge payouts. She drew national attention when she issued an opinion saying the vast majority of the more than 10,000 silicosis lawsuits consolidated before her were “manufactured for money.” She noted that the same dozen doctors diagnosed 9,000 cases of the serious lung ailment. In many cases, the physicians had not seen the patients and relied solely on reading X-rays. Trial lawyers had hoped that silicosis cases would yield billion-dollar paydays like those in asbestos litigation. The judge’s findings triggered investigations by a congressional committee, federal prosecutors in New York, and the Texas attorney general. In short, a vast majority of claims have stalled, resulting in long awaited victory for defendants.
The engagement lasted one year (2007) and was a very positive introduction to serving Private Equity Firms for WPI.