Case Studies

Financial Assistance for a Successful Plan of Reorganization

J.S. Held Acquires Shechter & Everett to Expand Forensic Accounting Capabilities for Family Law Disputes in Florida

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Home·Financial Assistance for a Successful Plan of Reorganization

The Situation

$100 million plumbing service contractor primarily for Home Depot. $1 million bank debt. Failed accounting systems. Chapter 11 filing.

  • The company provided installations of water heaters and HVAC systems primarily for Home Depot customers in 15 states, as well as undertook re-piping projects for larger residential and commercial properties.
  • Failed accounting systems resulted in poor financial information, making it virtually impossible to produce accurate financial statements.
  • Extensive and undocumented transfers of funds between the debtor entities and a real estate entity, separately owned by the owner of Delta.
  • An aggressive unsecured creditor committee seeking assets of a real estate entity or conversion of the case to a Chapter 7.
  • Disparate creditor interests resulted in fractured negotiations with equipment financers, IRS, credit card providers, and unsecured creditors.
  • Insufficient collateral available to generate additional liquidity necessary to repay creditors or refinance existing debts.

How We Advised

  • Evaluate and make operational accounting systems, and determine if it is possible to recreate records or begin to generate accurate ongoing financial records.
  • Identify where cash likely went after leaving the debtors’ bank account.
  • Implement a cash tracking process to better control cash flow.
  • Determine if all business units and geographic markets were viable.
  • Develop financial projections to initiate Plan of Reorganization negotiations.
  • The company confirmed a Plan of Reorganization after nearly 3 years of litigation in Chapter 11.
  • The plan calls for potential payments to various constituencies, with projected cash shortfalls in the early years to be funded through preference actions, and unsecured creditors to begin receiving payments in Year 6.

Key Contact

Dan F. Dooley, CTP 
Senior Managing Director 
Strategic Advisory Practice 
+1 603 660 8952 
[email protected] 

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