DISTRIBUTION
ESBA provided workout services for a client that manufactured and distributed high performance bicycles. The company, sponsors of two costly bicycle-riding teams (trick and racing) sold their product through a national manufacturers' representative network. Having filed for bankruptcy under Chapter 11, the company was targeted for liquidation by their bank. Their inventory consisted mainly of raw materials, giving it minimal liquidation value. Other assets included accounts receivable, machinery and equipment, and the owner's house.
ESBA was able to save the company from liquidation, while repaying the bank in full.
Key Workout Steps:
- Worked as a team in conjunction with the company’s accountants and attorneys to formulate and execute an effective workout plan.
- Employed contractors to convert the raw materials into finished goods that were, in turn, sold for full value. These newly generated revenues made the business more attractive to prospective buyers.
- After conducting a systematic search we were able to create a synergistic sale of the company to the owner of a similar business.
Results
All parties involved were satisfied at the completion of our eight- month assignment: the bank was repaid in full including all fees; all administrative costs were paid; the owner saved his house and received an employment contract; and creditors received ten cents on the dollar. Today, the business, which would have otherwise ceased to exist, is thriving
|