BANKRUPTCY (DEBTOR)
A distributor of concrete construction supplies had opened three remote branches in Georgia, Maryland and Massachusetts, two of which were performing poorly. In addition, two of the Company’s top salesmen had left, taking millions of dollars ESBA in business. The Company's sales base had been reduced from a peak of approximately $13 million to about $ 5 million. The business’ owner was openly fighting with both the Creditor’s Committee and it lender. The Company's lender was leery about a proposed Debtor-in-Possession (DIP) loan facility and pushed to shut the Company down. Similarly, the Creditor’s Committee was reluctant to approve funding or other plans based on the owner’s exaggerated claims for future sales. ESBA was retained to assist the owner in developing a Plan of Reorganization (PLAN) and to normalize his relationship with the other Chapter 11 constituencies.
ESBA immediately and successfully negotiated with the Company's lender for cash collateral and a DIP facility. ESBA also worked with Company management to develop a financial and operational strategy for reorganization, which included closing the under-performing branch operations. ESBA advised the owner not only on the structure of the plan, but on its execution as well. While the Plan was being prepared, negotiated loan agreement extensions, and restructured leases for the Company, as well as testifying in court.
During this process ESBA developed an excellent working and communication relationship with the Company's creditors and interested constituencies. ESBA insured that regular meetings were held to keep all parties fully informed.
ESBA and the Company completed the Plan and presented it to the Company's creditors and lenders. It was confirmed with little comment.
The Company successfully emerged from the Chapter 11 process eighteen months after it originally filed, and fully complied with the Plan . Today the Company has grown beyond its previous sales peak, is very profitable, and is considering acquisitions.
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