Early Turnarounds and Recovery Efforts

Turnarounds are Mr. Mosier’s long-suit dating back to the early 1970s.

Trans World Airlines Getaway Credit Card, New York, New York

The first turnaround for Mr. Mosier occurred in 1974/75 at TWA. The Getaway Credit Card had flat revenues for the prior three years, stalling at roughly $63 million. A marketing decision to put the credit cards in the hands of college students resulted in an unusually high bad-debt ratio – in excess of 15% of revenues. This made the card hugely unprofitable, and increasingly unpopular among the airline’s senior management. Mosier introduced a strategy of getting the Getaway Card in the hands of the airlines best customers. The goals were three-fold: (1) grow revenues, (2) lower bad debt to make the card a financial success at the airline, and (3) lower the fees paid to the credit card companies (American Express, MasterCard, Visa, etc.) for the privilege of using their cards. Secondary goals were to build on the card’s administrative superiority to build brand loyalty by offering streamlined service. Within one year after taking of the Getaway Card, and implementing the objectives, sales were increased to $85 million, bad debt dropped to less than 5% making the card a financial success and the discount fee paid to other credit card companies dropped by one-half percent. The turnaround was a huge success.

Delta Queen Steamboat Company, Cincinnati, Ohio

Following TWA and in 1979/80, Mr. Mosier served as President and Chief Operating Officer of the Delta Queen Steamboat Company that operated two overnight passenger paddle boats on the Mississippi and Ohio Rivers. At the time of his appointment, the company was owned by Coke New York, a New York Stock Exchange company. On $15 million in annual revenues, DQSC was losing roughly $4 million. Coke was anxious to get the company off its balance sheet in order to focus more attention on its soft-drink business. After overhauling the marketing (with the goal of increasing revenues) and focusing on cost reductions in the operations area, revenues doubled to $30 million. Operating costs were kept in line, and DQSC generated a pre-tax profit of $1 million – its first in several years. This permitted a stock spin-off where each holder of a share of Coke stock received 5 shares of DQSC stock, and the company was successfully turned around.

Executive Jet Aviation, Columbus, Ohio

In the early 1980’s, Mr. Mosier served as a consultant to the Board of Directors and management of Executive Jet Aviation – a company that specialized in operating a fleet of 24 executive jets for hire by Fortune 1,000 companies. Dramatically increasing interest rates (hitting a high of 18%) and a corresponding softness in the economy combined to take costs out-of-sight while demand for the exclusive travel service was rapidly declining. The company was highly leveraged, and its best assets were its name, reputation and impressive list of Corporate America clients. The company’s gross was just over $15 million per year and losses were mounting. In this environment, attempts to increase revenues produced marginal results, and cost reductions were insignificant in comparison to the overbearing interest costs. Therefore, the decision was made to sell the company as the best way to recapitalize the company. A sale was eventually completed to an investment consortium located in New York. With proper capitalization and a favorable turn in the market, Executive Jet later pioneered the concept of selling fractional shares of a jet (fractional ownership). This catapulted the company into the stratosphere; in 1998, the company was sold to Warren Buffett.

Sumner Trust, Orange County, Ca

In 1985, retired Superior Court Judge Bruce W. Sumner was appointed the Trustee for Valencia Bank’s failed Trust Department. His goal was to attempt to recover approximately $10 million for 65 pension and profit sharing plans that had invested through the Bank’s trust department. Sumner hired Mosier to take charge of the administration of the case, and recover the assets. This involved the sale of interests in a Christmas tree farm in Oregon, an orchid farm in Hawaii and numerous real estate interests in Texas and Oklahoma in the aftermath of the mid 80’s bust in the oil industry. After a two year effort, the Sumner/Mosier team paid the pension plans 100% of their original investment plus interest, and covered the cost of operating the Trust’s recovery effort. Mr. Mosier considers this his first Court appointment with a noteworthy recovery.