Situation
A telecom accessories distributor operating across Iraq and the UAE had reached technical insolvency with liabilities 2.3 times current assets, USD 3.1 million in trade payables, three active legal proceedings, and monthly cash burn of USD 180,000. Two restructuring firms had reviewed the situation and declined to engage.
Complication
Books were unaudited for two years. A USD 1.4 million inventory discrepancy suggested misappropriation or unrecorded write-offs. Two brand distribution agreements were in performance-clause breach. UAE and Iraqi jurisdictions applied different creditor priority rules. When I completed the forensic review, I found that one warehouse manager had been processing returns without recording them, accounting for USD 900,000 of the discrepancy, and USD 500,000 reflected genuine stock deterioration never formally written off. Establishing that distinction was critical because one finding was an accounting correction and the other was a potential internal fraud requiring a different response entirely.
The Critical Decision — What Almontather Rassoul Saw and Did Differently
The internal fraud finding created a difficult situation: the warehouse manager was a family member of the founder. I presented the forensic findings privately and gave the founder 48 hours to decide how to proceed before I included anything in creditor-facing documentation. He chose to terminate the employment and accept the accounting correction. I then structured the creditor disclosure to accurately reflect the corrected inventory position without speculating about intent, which was not my role. That decision — presenting the finding privately before formal documentation — preserved the engagement and allowed the restructuring to proceed.
Methodology — Why This Approach and Not Another
I chose coordinated individual creditor negotiation within a framework rather than a single restructuring proposal, because the 14 creditors had different risk profiles and different leverage positions. A unified proposal would have been rejected by the highest-leverage creditors and might have triggered the remaining legal proceedings. Individual conversations sequenced strategically — beginning with the most flexible creditors to establish momentum — changed the dynamic before approaching the three who had initiated litigation.
Resolution — Delivered by Almontather Rassoul / MRC Firm Ltd.
Ninety-day stabilization: emergency cash flow triage, payment standstills with seven of fourteen creditors, and a forensic stocktake clarifying the inventory discrepancy. Legal counsel coordinated across both jurisdictions to ring-fence personal guarantee exposure. Restructuring: a five-year creditor repayment plan with the litigating creditors, renegotiated brand distribution agreements with revised KPI schedules, and a new operating model reducing fixed costs by 44%.
What Was Not Fully Resolved — and Why
Seven creditors accepted standstills and participated in the restructuring plan. The remaining seven received partial settlement from available cash with residual claims subordinated within the plan. Two of those creditors have since indicated they will seek additional recovery through arbitration. That risk was disclosed to the founder and priced into the restructuring terms.
“Rassoul found something in our books that we had not known was there and handled it in a way that preserved our ability to restructure rather than destroying it. That judgment under pressure is not something you can learn from a textbook.”
— Founder, Telecom Distributor (name withheld)
Consultant: Almontather Rassoul, PhD · MRC Firm Ltd. · montather-rassoul.com · linkedin.com/in/montatherrassoul