Turnaround specialist says his 'product is me'
Specialist: John M. Collard's job, which he has done around the world, is to
turn around distressed companies, but Network Technologies presented a difficult
challenge.By Stacey Hirsh
September 8, 2002
John M. Collard arrived at
Network Technologies Group Inc.,
an empty desk and chair were all that filled his office.
There was no computer. The file
drawers were empty. The walls were bare.
"There was nothing here,"
Normal, perhaps, for a new company.
Baltimore business was 6 years old, and Collard had been called in to save
A turnaround specialist whose job is to rescue troubled companies,
Collard had been hired by the board of Network Technologies Group to figure out
what was going on inside, to stabilize the company, and to find and hire his
"What didn't surprise me was that when I walked in it was
worse than I was led to believe," said Collard, 56, who owns
Strategic Management Partners Inc.,
and has been involved in more than 40 mergers and acquisitions. "It's always
worse than I'm led to believe."
This time was different. The job wasn't
just hard. It was impossible.
From the vacant office of NTG's former
chief executive, Collard discovered something even more vacant: the numbers in
Within hours of Collard's arrival July 1, the story
unraveled of a small Baltimore company suspected of being fraught with deceit
and accounting schemes.
"Let's face it, this thing just imploded,"
Distressed companies are his specialty. A 1969 graduate of
Southern Illinois University, Collard grew up north of Chicago. He began his
career as a financial analyst and went on to work for nearly a decade at Martin
Marietta Corp., long before it merged with Lockheed Corp. in 1995.
wasn't until after he was recruited to help Delta Data Systems of Columbia that
Collard found his calling.
He shrank the company, sold its assets and
took it into bankruptcy in 1990.
"That was my first client," Collard
recalled. "I just said to myself, 'My product is me and my ability to run
Collard's other clients have been around the globe, from San
Diego to Pennsylvania to Eastern Europe to Baltimore. He typically comes into a
company as a chief executive, deputy chief executive or as a consultant for
equity capital investors, though in the future he hopes to work for a company on
the investment side.
Patrick Jewel met Collard about two years ago when
he was interviewing candidates to take over Xcellent Ventures LLC, a troubled
sportswear company in Largo in which Jewel was a major investor.
fishbowl-like conference room, Jewel was running late interviewing someone when
Collard arrived for his 5:30 p.m. appointment. As he looked outside the glass
room, Jewel saw Collard standing in front of an open door with the sun setting
behind him. He had his hands on his hips and a look on his face that said, "It's
my turn," Jewel recalled.
"It was sort of like a Wild West picture with a
gunslinger there," Jewel said.
Jewel said Collard was aggressive and
reminded him of Ross Perot. Even though he had interviewed 10 candidates for the
job, Jewel said, he selected Collard right away.
"There was no question,"
Jewel said. "There really wasn't even another group of people that I felt like
could do the job that he was preparing to do for me."
Collard also helped
run the Turnaround Management Association, a Chicago group of which he was
chairman of in 1995.
Members of the association said Collard was
instrumental in developing a communications program within the organization,
bringing discipline to it and keeping it growing. TMA had about 1,500 members
when Collard took office there in 1995 and now has more than
'One of the key people'
"John was really one of the key people, in my
opinion, in terms of really energizing the group," said Martin J. McKinley, a
past association chairman who is president of Wells Fargo Business Credit Inc.
"He's thorough, he pays attention to detail, identifies
good talent in people and gives people a clear direction and then lets them have
enough free rein to accomplish what needs to be accomplished," said Tom Hays, a
turnaround specialist from outside Philadelphia who is a member of the TMA and
president of its sister organization, the Association of Certified Turnaround
But for a struggling company in need, Collard's help
doesn't come cheap - about $250 to $500 an hour. For that price, Collard will
take control of a company and stop the bleeding, put in a new plan for running
the business and hire his replacement.
"I'm always working myself out of
a job," Collard joked.
Office is in his home
He spends much of his working hours behind the desks
of other chief executives, but Collard's desk is in the basement of his Annapolis
home, where the office overlooks a garden and a small fishpond. The office is
adorned with a boat wheel, a pillow that reads "A man's place is on his boat,"
and a miniature Wilson character from the Tom Hanks movie Cast Away.
it's no surprise that Collard likes to spend his spare time on his 33-foot
sailboat or on his Harley-Davidson motorcycle, which also is evident in
Collard's decorative office, where a Harley clock that vrooooms every hour on
the hour hangs on the wall.
But riding a Harley might be the last place
to look for this gray-haired businessman who can be seen during the week in dark
suits, crisp shirts and wire-rimmed glasses.
Recently, Collard has spent
his days at 911 S. Ann St. in Fells
Point at Network Technologies Group.
A privately held company, NTG
installed cable for utility and telecommunications companies, including Comcast
Corp., AT&T Corp. and MCI.
When Collard arrived in July, he replaced
Michele Tobin, NTG's former chief executive and co-founder. She could not be
reached for comment for this article.
Collard said that after he began
asking questions but wasn't getting the answers he thought he should, he
discovered that NTG had toyed with its books. When he called Comcast, the
company said it owed NTG about a third of what Collard thought he would be
"Pretty soon, one thing starts coming after another," Collard
At 10 a.m. on his second day on the job, Collard was in a
conference room with an accounts receivable clerk and his supervisor going over
paperwork. Again, Collard's questions weren't getting answered.
the nervous clerk asked his supervisor, "'Can I tell him?'" Collard
Collard forcefully told the clerk, "You better tell
NTG had overstated profits by $4 million by creating $2 million in
phony receivables invoices and by failing to list $2 million in accounts
payable, Collard was told. He said the company inflated its numbers to increase
its line of credit with Mercantile-Safe Deposit and Trust Co.
confirmed that before he arrived, the company had deducted money from workers
paychecks for their 401(k)s but hadn't sent the money to the firm handling the
accounts. Checks that NTG had written for employee health insurance in June
bounced, so the workers were not covered, he said.
"When I asked them,
'Why did you do this?' they said, 'We were told to,'" Collard
Collard called NTG's accountants, Ellin & Tucker, Chartered of
Baltimore, to double-check his findings, and the story continued to
Collard had seen troubled companies before, but he said he had
never uncovered fraud to this extent.
Though the situation at companies
is typically worse than he is led to believe, "the fact that it was this bad was
a surprise," Collard said.
NTG closed July 12, and its 125 workers lost
The FBI and the state attorney general's criminal
investigation division are thought to be investigating the
Collard said he could have saved the company had NTG's board
hired him sooner.
By the time he got there in July, it was too late, he
said. So Collard closed the company and auctioned off its assets late last
month, raising more than $750,000 to go to the bank.
That money won't
cover the bank's losses, Collard said. And NTG's former employees will never see
their last three weeks of pay.
"Imagine when you go home Friday night and
you don't know how you can make that payroll for 125 people," Collard said. "And
unless there's a miracle you can't, and at NTG you couldn't."
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