Case Studies

Out-of-Court Sale & Wind-down Nets a Great Recovery

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

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Home·Out-of-Court Sale & Wind-down Nets a Great Recovery

The Situation

Automotive OEM provider of pedals and steering columns. $150 million in revenues. $30 million of debt. Private Equity ownership.

  • The Company was losing $6 million annually heading just as the automotive industry was to be bailed out by the US government.
  • Revenues were dropping daily.
  • The Private Equity ownership group wanted to exit the business and stem losses.
  • $30 million senior secured debt and $10 million junior secured piece held by owners, believed to be collateralized, so the owners chose liquidation.

How We Advised

Our experts were engaged by Private Equity to manage the liquidation process and maximize value.

  • We engineered an “out-of-court” bankruptcy.
  • Surcharge implemented, resulting in $14 million over five months (U.S. and Sweden).
  • Trade creditors ($14 million) organized into an informal committee with counsel.
  • Three entities sold: Sweden and China as stock sales, and the CT plant as an asset sale.
  • Secured lender paid out 100% in 105 days.
  • Junior secured lender received 70%, despite no mortgages on real property.
  • Unsecured claimants received 33%.
  • Professional fees under 50% of the cost of Chapter 11.
  • No disruption of service to OEMs on mission-critical safety parts.
  • Net Value Recovery $10 million more than a Chapter 11.

Key Contacts

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

 

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

Related Practice Areas

> Out-of-Court Wind-downs 
We deliver strategic guidance through the wind-down of business operations or underperforming assets, helping preserve value and reputation while avoiding the disruption, cost, and public scrutiny of formal bankruptcy. Our expert financial and operational advisors apply decades of experience providing exit solutions across a wide range of industries and complexities to deliver, and often execute, comprehensive solutions for distressed businesses. 

 

> Turnaround and Restructuring Services 
Navigating the many challenges confronting a company in transition requires an operationally focused approach that looks beyond the balance sheet to minimize further degradation and build a path to sustainable growth. Drawing upon decades of experience in the turnaround space, we help companies in transition identify practical strategies to improve profitability and liquidity for immediate relief, while concurrently developing and executing a comprehensive turnaround plan for long-term, sustainable value creation. 

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