Independent restoration contractor, TPA non-transferable, AR timing gap kills DSCR
§ 01 · Observed
What was documented in diligence.
TPA programs: all four programs registered under owner's personal insurance adjuster credentials — no path to entity transfer identified by TPA administrators. AR aging: $210,000 in 90+ day receivables comprising disputed supplement claims; carrier positions on two claims unresolved for 7+ months. Accrual-cash gap: $310,000 on trailing 12-month P&L — cash-basis SDE $178,000 below accrual SDE. Supplement revenue included at $94,000 target; historical settlement rate 62% suggests actual collectible amount approximately $58,000. Lender DSCR on cash-basis SDE: 0.87× — below threshold with no structuring path that clears 1.20×.
§ 02 · Outcome
What happened.
Buyer submitted LOI at 3.6× accrual SDE. After cash-basis adjustment, disputed AR exclusion, and supplement settlement restatement, adjusted SDE declined 52%. DSCR on adjusted SDE was 0.87×. Financing declined. Deal terminated.
§ 03 · Structural Pattern
How this deal fits the four-pillar framework.
Lower-band conditions on all four pillars: non-transferable TPA access eliminating primary referral source, AR timing gap converting accrual SDE to sub-1.0× DSCR on cash basis, supplement revenue at target creating a 38% overpayment on gross revenue, and owner-personal adjuster relationships that do not transfer. The AR timing gap killing DSCR is the canonical lower-band restoration pattern.
This is an anonymized composite drawn from observable structural patterns in the sample window. It is not a specific deal. The structural pattern, band placement, and outcome reflect commonly observed combinations; a future consented case study will replace this entry.
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