Saving a Company from Bankruptcy

Unify CEO and former CFO Todd Wille talks about how he was brought back to revive the software company after it was rattled by charges of securities fraud

by Karen E. Klein

This month, UFYC, a Sacramento database management software company, announced its first operating profit in more than five quarters, pulling out of a long slump after it was rattled by charges of securities fraud. Unify reported total revenues in the first quarter of fiscal 2008, ended July 31, of $4 million, up 129% from first-quarter revenues of $1.7 million a year earlier. A net loss of $218,000, vs. a loss of $754,000 in the year-earlier quarter, was due largely to the acquisition of software developer Gupta, a deal intended to extend Unify's reach. But business hasn't always looked so promising. In 2000, Todd Wille, who had been Unify's chief financial officer in the 1990s, was asked to return to the company and save it from bankruptcy. Currently chief executive and president, Wille spoke recently to Smart Answers columnist Karen E. Klein about how the company overcame some dark times. Edited excerpts of their conversation follow.

When did you first get hired at Unify?

I started here in August, 1995. The company had been in business nearly 15 years and it was a very strong firm with a solid enterprise product. In June, 1996, we went public on the strength of a new application development product. I was the controller at that point, and I later got an opportunity to become the CFO. As a company, we struggled through 1996 and 1997, but by the end of 1997 we were back to break-even with some revenue growth.

When did things start going south?

In 1998, I left the company because of conflicts with the CEO and because I felt I'd done my job in getting the company back on its feet. I went to work at a firm in Colorado. While I was gone, the CEO promoted my controller to CFO. I had told him not to do that because I didn't think he was a strong enough accountant to be CFO of a public company. But the company got more and more aggressive with its accounting interpretations. By the time I was called back in mid-2000 there were investigations ongoing by the FBI and SEC. In 2002, conspiracy and securities fraud charges were filed against the former CEO and CFO, and they were eventually convicted. As a result, the company nearly went bankrupt.

Why did you return to the company?

Part of it is my personality. I'm a farm boy from Iowa. I'm not used to giving up. I'm probably a little hard-headed. We had such a heritage of fantastic employees, great engineering, great administrative sales people and customers here. I was an unusual controller because I spent a lot of time talking to the sales and marketing guys, who talked to the customers. I knew the technology was critical and I felt there was truly a business here, but that the company had suffered from leadership issues.

Where do you start to salvage an operation that's in such deep trouble?

Those were very dark days in the beginning. I had two challenges. The first day I arrived, there were 19 forensic government auditors running around the company and everyone was scared to death. We had just over 100 employees at the time, and most of them had no idea what had happened. We also had multiple lawsuits that had been filed against us.

My schedule was to show up early in the morning and spend the first six hours dealing with the auditors, going through financial records and old e-mails. I would spend my afternoons, until 6 or 7 p.m., working with the chief technology officer, who was getting the engineers busy building something new. I would talk to the guys I knew who had been in sales, and I found out that the sales behavior while I was gone had gotten quite strong-armed and aggressive because of the pressure the CEO was putting on. I took a guy who I knew was a customer advocate and asked him to reintroduce the company to longtime customers.