Stout was engaged to assist outside counsel in assessing whistleblower allegations of financial statement manipulation, specifically related to withholding payments to vendors while accelerating customer payments to boost the company’s year-end cash balance. Stout was also retained to investigate the potential downstream effects of these actions, including impacts on cash balances in subsequent quarters, financial reporting obligations, and financial covenants.
Stout personnel reviewed the company’s cash management practices for accounts payable and receivable, general ledger extracts, accounts payable aging, accounts receivable aging, loan agreements, and debt covenant certifications, among other documents, during their investigation. Stout’s findings were presented alongside outside counsel to a special committee of the board.