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Services
Bankruptcy Advisory
ESBA offers a full range of value-added financial advisory services to stakeholders in court supervised restructurings. Our restructuring professionals work closely with our operations experts, our corporate finance professionals, and our litigation consultants to bring our full capability to the table.
Debtor-Side Advisory
On the debtor side, we typically assume the role of financial advisor, CRO, and/or investment banker to the debtor. In this capacity, our professionals guide management through the financial and operational aspects of a Chapter 11 case, either as advisors or taking on a management role. In connection with a bankruptcy filing, ESBA assists the company in ffectively planning for and managing through the process. Often, this begins with arranging Debtor-In-Possession (“DIP”) financing. In this effort, we work with the company in:
- Its discussions with its current lenders, who may be candidates for providing DIP financing, as well as discussions with other prospective DIP lenders;
- The preparation and review of the related projections and other supporting documents;
- Reviewing term sheets, and negotiating and closing the financing; and
- Assisting the company in its preparation for a Chapter 11 filing, including assistance with preparation of support for the basis for the filing, various motions such as first day filings, DIP financing and/or cash collateral, and other tasks as may be necessary to provide for an orderly filing.
As the Chapter 11 filing process moves forward, ESBA works closely with management and the company’s other advisors by addressing areas such as the following:
- Reviewing the company’s current short-term liquidity projections and assisting management in modifying and updating such projections based upon current information, ESBA’s observations and other information as it becomes available;
- Assisting the company in the development and preparation of an operating plan and cash flow projections, as well as the presentation of such plans to the board of directors and the company’s creditors;
- Assisting the company with the preparation of reports and communications with the company’s lenders and other constituencies;
- Assisting the company with the preparation and review of the various reporting requirements of the court during the Chapter 11 proceedings, including the Statement of Financial Affairs and Schedules, the Initial Reporting Requirements and Monthly Operating Reports;
- Assisting the company in addressing issues and in discussions with lenders in connection with maintaining ongoing financing of the company’s operations;
- Assisting the company in the development, evaluation, negotiation, drafting and execution of any potential plan of reorganization or restructuring transaction;
- Assisting the company in preparing the Disclosure Statement;
- Assisting the company in the negotiations with lenders, creditors, and other parties-in-interest regarding any potential plan of reorganization or restructuring transaction;
- Assisting the Company in obtaining exit financing; and
- Providing testimony at any hearings that constitute part of the process, including, without limitation, financial matters relating to a plan or plans of reorganization, the feasibility of such reorganization plans and the valuation attributed to the entities.
The following is a representative listing of the cases in which ESBA has served as Financial Advisor to the Debtor:
- Mastercraft Interiors
- Pharmaceutical Formulations
- Food Management
- C2 Media
- SmarTalk Teleservices
- FRD Acquisition Co.
- Unidigital Inc.
- Noonoo Rug Company
- Hexacon Electric
- Watson’s Quality Food
- CF Capital
- Wireless Telecommunications
- Roxborough Hospital
- Let’s Talk Cellular & Wireless
- Integral Nuclear
- Novo Networks System
- Lower Bucks Hospital
Advising Creditors and Creditors' Committees
ESBA also has an active practice serving as financial advisor to official committees of unsecured creditors, as well as other creditors in bankruptcy situations. In this role, we seek to achieve the objectives of our clients, which may vary from achieving the maximum possible financial recovery on their pre-petition unsecured claims to ensuring that it is feasible for the debtor to reorganize and move forward as a “good customer” capable of meeting its financial obligations to its creditors. In representing creditors, we assess:
- The condition of the Debtor's operations
- Ongoing viability of the business
- Ability to stop operating losses
- The Debtor's intended restructuring path(s)
- If it is the development and confirmation of a plan of reorganization (POR),
- The feasibility, taking into consideration the timeframe required/available, infrastructure needs (e.g., systems) and management capabilities
- Consistency with the best interests of the unsecured creditors
- Advisability of the Debtor’s considering a Section 363 asset sale
- If the Debtor feels that a Section 363 asset sale is the appropriate restructuring path,
- Again, consistency of a sale with the best interests of the unsecured creditors, versus a POR enabling the Debtor to reorganize and continue operations as a good customer under the same ownership
- Existence of an initial bidder (“Stalking Horse”) in place
- Any previous ties between the Stalking Horse and the Debtor
- If the sale process has not progressed to the point of having a Stalking Horse in place, the likelihood that it will be successfully concluded at a price that provides a recovery for the unsecured creditors
- Estimated valuation of the assets
- Adequacy of the time provided in the proposed sale procedures
- Relative attractiveness of a liquidation
- Regardless of the restructuring path being pursued, other areas that should be evaluated or investigated to enhance the recovery to unsecured creditors; perhaps including:
- Potential preference actions
- Equitable subordination actions
- Fraudulent conveyances
- Other avoidance actions
- Management malfeasance
- Redundant assets that could be sold
In all of our creditor committee assignments, we work closely with outside counsel and the members of the committee to ensure that, as the “eyes and ears” of the creditors, we are providing the appropriate mix of services in a timely manner for the lowest possible fee.
Click here for tombstones highlighting details of some of our more recent committee FA assignments.
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