Playing For Keeps
Buying a bankrupt business was only the first step. Here's how two entrepreneurs turned a failing company into a multimillion dollar success story
Even under the best of circumstances, taking the entrepreneurial
plunge requires courage. But for a first-time business owner to
willingly take on the challenge of rebuilding a business from the
roots up takes true grit.
After a leveraged buyout from its founders in 1991, the
once-successful Raleigh, North Carolina, residential playset
manufacturing company Woodplay had plunged into bankruptcy and
receivership. By late 1993, the company was up for grabs to the
highest bidder.
Enter Jim Sally, 40, and Tom Marenyi, 48, who were searching for
a business to call their own. "We knew nothing about the
company," recalls Marenyi, who spotted a notice in the local
paper indicating that only one purchase bid for Woodplay was before
the court; additional bids would be accepted during a seven-day
"upset" period.
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Marenyi and his brother-in-law Sally had several purchase
criteria in mind: a quality product, a good name, market potential
and a solid formula that could be improved upon. The partners'
hasty research revealed that Woodplay products were well-made and
well-regarded in the industry. They also discovered that, even with
limited catalog distribution, the company had ranked high in its
niche market for years before its troubles.
Encouraged by Woodplay's seeming potential, Marenyi says,
"The decision was made to put in an upset bid, and much to our
surprise, no one countered it." Marenyi and Sally (along with
Jim's father, John Sally, as a silent partner) became the new
owners of the capsized company just two weeks later.
"[The purchase price] just bought us the assets," says
Marenyi. "We still had to get the thing cranked up."
Together, the partners coughed up several hundred thousand dollars
more from their savings for working capital. Marenyi dove in to
handle marketing, finances and administration while Sally took
charge of manufacturing operations, purchasing and technology.
Salaries could wait, the new business owners agreed; they'd
do whatever it took to fund the company internally. Purchasing
Woodplay with their personal savings was the beginning of a
commitment by the partners not to go into debt to bring the ailing
company back to life.
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