Case Studies

Converting a Liquidation into a Going Concern Sale

J.S. Held Acquires Clark Seif Clark, Strengthening West Coast Capabilities for Environmental Claims, Disputes, and Catastrophe Response

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Home·Converting a Liquidation into a Going Concern Sale

The Situation

Medical Equipment & Device Manufacturing

  • Years of mismanagement and poor operational efficiency had continued to depress Sales volume.
  • Growing outstanding payables stifling vendor relationships.
  • Continuous labor shortages due to distrust of senior management and low wage rates despite being unionized.
  • Overinflated inventory of obsolete product components (ventilators) due to the COVID boom/bust and the US government’s saturation of the ventilator market.
  • No customer price increases in over 8 years.
  • Sold Building in a sale leaseback transaction without the lender’s knowledge and used cash to reduce delinquent AP.
  • Company was in a partial shutdown mode due to lack of cash.

How We Advised

  • Our experts were named Interim CEO.
  • Negotiated with the union after the WARN notice was given to rehire 35% of the employees to increase production.
  • Developed viable Turnaround Plan.
  • Sourced a new lender who believed in the Turnaround Plan, refinanced the original loan, and ultimately, provided DIP financing when the Company entered Chapter 11 to execute a 363 Sale.
  • Restarted operations with the leaner staff and improved profitability, liquidity and operational efficiency.
  • Developed a comprehensive quality assurance plan to handle numerous outstanding FDA observations.
  • Secured a stalking horse biidder to enter bankruptcy with a purchase price far exceeding liquidation scenarios.
  • Reinvigorated a once dormant culture to believe in the Plan and continue working until the transaction closed.
  • Successful sale of business yielding 4.5x the original liquidation value.
  • Paid secured lender (and DIP lender) in full and paid unsecured creditors 35%.
  • Saved over 75 jobs in NY and St. Louis

Key Contacts

Mark J. Welch, CPA, CTP
Senior Managing Director
Strategic Advisory Practice
+1 412 498 8258
[email protected]

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