Engagement
A private equity-backed global food distributor was facing significant monetary losses due to customers not paying for goods. The firm wanted to understand more about the cause of these unpaid debts and ultimately improve its approach to relationship vetting and risk management.
Investigation
Gryphon was engaged to perform an investigation into the distributor’s client relationships and internal processes. The team discovered a lack of formal due diligence and compliance procedures when onboarding customers. Several key clients were found to have weak financial histories yet had been granted credit terms without proper background checks or financial assessments. This gap in the company’s vetting process allowed clients to accumulate unpaid debts.
Result
Gryphon’s findings highlighted the critical importance of conducting thorough background investigations on current and prospective clients. The distributor implemented stronger due diligence procedures and tighter internal controls, which significantly reduced the risk of future financial losses. The private equity firm was able to protect its investment by ensuring more secure and reliable client relationships moving forward.
