SARCOM had been recently purchased by a private equity firm. The company was losing almost $5 million annually. Angart was hired as Chief Operating Officer and Chief Financial Officer to turn the company around, manage cash and fix various financial issues.
SARCOM was party to an unfavorable management agreement with a previously related company. SARCOM received a management fee from the previously related company for arranging for the purchase and sale of computer equipment and software, servicing of related accounts receivable, maintenance of records, and employment of required employees. The finance company owned the accounts receivable, inventory and purchase orders. Angart recognized that he needed to fix this arrangement in order to turn SARCOM around.