Content area
Full Text
Reseller was going full-steam ahead when IBM Credit pulled plug due to accounts receivable questions
ALTHOUGH THE VERDICT is not in on the exact circumstances that led to the crash and burn of Arrowhead Industries Corp. last month, the reseller's fate serves as a cautionary tale.
It is a tale of how a company with a revenue run rate of almost $52 million saw its future quickly unravel soon after IBM Credit Corp. pulled the plug when auditors discovered an $8 million hole in the reseller's accounts receivable.
Arrowhead's fall points to the need for resellers to maintain sharp checks and balances on their business, said fellow resellers, and to have necessary precautions in place even if the business is running smoothly.
Arrowhead President and Chief Executive Kenneth Hunt denied any wrongdoing. But other resellers said it appears that Arrowhead's top management may have not have been watching for the warning signs, perhaps because business was growing briskly.
All things seemed to be running smoothly for Hunt since he bought a majority stake in Arrowhead in July 1993. It was his first plunge into the channel. Prior to that, Hunt, a Native American with a sales and marketing background, had...