When businesses fail, consulting exec works to pick up the pieces

Ask Lisa Poulin about her career, and she'll tell you about busted and broken businesses: The Hunt brothers who tried to corner the world silver market, foiled insurance fraud cases, the fatal fire at the previous MGM Grand, and most recently USA Capital, the hard-money lender that failed owing $962 million to investors.

Poulin works as a trustee, interim manager or a chief restructuring officer for bankrupt companies. She either nurses broken businesses back to health, sells them or shuts them down.

She now serves as trustee for USA Investment Partners, a company that Tom Hantges and Joe Milanowski set up to develop real estate.

USA Capital solicited money from about 6,000 investors and used the money to make short-term loans to developers, including USA Investment Partners. USA Capital emerged from bankruptcy early last year when Compass Partners of New York bought some of its assets and the right to service many of the loans.

USAIP, the partners' investment company, was pushed into bankruptcy so that Poulin could try to convert assets from 75 different businesses and projects into cash for creditors.

Poulin, the daughter of a diplomat, was born in Ho Chi Minh City, the former Saigon, in Vietnam. She became a commercial banker in Philadelphia at Fidelity Bank and worked overseas in its London office for a year, packaging foreign loans for sale. Later, she landed a job at accounting and consulting firm

Question: What did you investigate at Coopers & Lybrand, which later merged to form PricewaterCoopers?

Answer: One was a guy who torched his store, claiming he had all kinds of inventory in it. I reconstructed the business using checking-account information. He hadn't spent money in God knows how long. So I asked, "How could he have any inventory here?"

I also worked on the fire of the original MGM Grand (where 84 people died in 1980). I helped create the database, using punchcards and an old mainframe, so the court could pay all the creditors in a class action settlement.

Question: You worked later at accounting and consulting firm KPMG. What did you do there?

Answer: Yes. One of the first cases I did was Placid Oil Co., which was trying to corner the world's silver market. The company took all of its oil wells and pledged them to borrow in order to pay the Chicago Board of Trade for silver contracts.

H.L. (Hunt) was dead. (His sons) Bunker, Herbert and Lamar were involved (in the silver scheme). I was the lead person on the account representing Placid Oil Co. in the bankruptcy. The company emerged (from bankruptcy), became successful and was sold in the mid-'90s.

Question: What are the key talents you need in reorganizing a bankrupt company?

Answer: You've got to have a passion to investigate, to question. And you have to have good sound business judgment. You have to be strong enough to stand up to people and you have to be able to work well with others. You have to treat everybody as a team to get a resolution.

Question: Would you give me an overview of USA Capital and USA Investment Partners?

Answer: USA Capital made loans and then would service the loans. USA Investment Partners was owned primarily by Hantges and Milanowski. They also owned equity interests in 75 different companies, many of which borrowed money from USA Capital.

A real estate developer would say, "I will do a development, but I need money." Hantges and Milanowski would say, "If you give me 50 percent of that deal, I will arrange for you to get a loan."

USA Investment Partners owned 100 percent of the Hotel Zoso (in Palm Springs, Calif.) They borrowed money from the mortgage company.

Hantges and Milanowski didn't have a lot of money coming in. So they also borrowed from Salvatore Reale (a former associate of reputed mob boss John Gotti).

After the USA Capital bankruptcy ends, (two investment funds, USA Capital First Trust Deed Fund and USA Capital Diversified Trust Fund) forced USAIP into bankruptcy.

Salvatore Reale knew if he got closer to the assets that he had a better chance of getting paid. So (Reale) got (a deed of trust) against the Royal Hotel (in Las Vegas). When the Royal Hotel sold, (Reale) had his hand out.

Question: The payments to Reale were contested. But you reached a compromise, didn't you?

Answer: Yes. I have already distributed $8.9 million (to the diversified fund). I paid Reale $2 million. Ultimately, that case is going to end up distributing close to $19 million. We sold the Hotel Zoso for approximately $25 million.

Question: Were all 75 companies involved in real estate?

Answer: Except for two. One is vegashotspots.com, a Web site for visitors to Las Vegas). We feel there's no value there. The other is called Twelve Horses, a Web design and online marketing company in Reno.

It has a (computer software) platform for messaging with high-security against eavesdroppers. The company is also very good at optimizing sales to targeted markets. Say you want to target people who are 25 to 30 (years old) for a snowboarding weekend. The company has search engines and ways to get people who have the right profile.

Tom Hantges fell in love with (Twelve Horses) and said, "Let's get the licensing rights in the United States from an Irish company." Hantges and Milanowski invested $15 (million in Twelve Horses).

Hantges and Milanowski thought they were going to sell this business for a big pot of money to a publicly traded company in Ireland. The deal went away.

Question: What have you told the managers at Twelve Horses?

Answer: You guys own 40 percent of it. You want a future, you've got to make this work.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or (702) 383-0420.