Ch. 11 Reorganization of Heavy Equipment Dealer
Financial Advisory, Lender Relations, Projections & Reporting
The Bottom Line:
As Financial Advisor to a bankrupt heavy construction equipment vendor, Stapleton Group collaborated with the company’s management and bankruptcy counsel to achieve a confirmed Plan of Reorganization under Chapter 11 in less than 6 months.
The company’s secured lender had lost confidence in its borrower’s financial projections and cash management. We worked diligently to regain the lender’s trust through realistic and defensible financial projections and reporting. This was key to the lender’s acceptance of the Plan of Reorganization. Our process included:
- Quickly evaluating the company’s asset valuations and operating strategies;
- Preparing cash collateral budgets and other required reports for the court;
- Preparing realistic projections for payment of unsecured creditors over 5 years, demonstrating a successful emergence from Chapter 11; and
- Providing real-time financial data to counsel for quick and effective negotiations with creditors.
The confirmed Plan allows the business to continue selling equipment in the ordinary course, applying proceeds to pay down its equipment secured loans.
The Business Issues Leading to Chapter 11:
The Pacific Northwest company’s bank did not renew its line of credit in early 2020, creating cash flow challenges. The company then suffered a precipitous decline in sales due to the Covid-19 pandemic. After failing to reach an out-of-court agreement with its lenders for principal deferrals, the company filed for Chapter 11.
Contact Neal Gluckman at (213) 404-0110 or Joan Hadeed at (213) 855-1918 to learn more.