Restructuring Advisors

Burritt appointed Assignee

Burritt appointed Assignee for Ohio based Assignment for the Benefit of Creditors

Industry: Transportation
Region: Eastern Half of United States
Revenue: $20 million
Expertise: Disposition of High Value, Complex Assets

The Challenge:

A regional transportation company had suffered losses exceeding $3.0 million over the prior five-year period. As a family operated business the organization was in transition. The second generation felt it was time to move on and the third generation was moving in with exciting plans but limited experience. To achieve their aggressive growth plans the company sought new options for capital to expand their fleet. After finding limited bank funding, they agreed to work with financing arms of the OEM’s and equipment dealers. The company was able to acquire $1.6 million in new or nearly new equipment just as the industry was entering another downturn. The company had no cash, no availability and with no real motivation to continue the fight.

Actions:

After conferring with their trusted legal advisor, the management team decided the best option available was to file an Assignment for the Benefit of Creditors (ABC). The pool of assets appeared to be of sufficient value to pay the secured creditors as well as providing a recovery for the unsecured creditors.

The Results:

Through the Court of Common Pleas, Probate Division in Hamilton County Ohio, Jim Burritt, Managing Partner at Restructuring Advisors was appointed as the Assignee for the four entities involved in this case. Burritt was selected due to his familiarity in the industry and past experience with complex dispositions of high value assets. “Re-acquiring assets that are on wheels and scattered across the country is always a challenge” said Burritt. “We knew where most of the drivers were headed when they were dispatched so our initial focus was to convince the drivers that returning the equipment in a timely manner and in good condition was in the best interest of all parties.” Receivables totaling $4.5 million were collected while litigation efforts began with several large problematic accounts. Facilities were shut down, inventory of parts, trucks, trailers and tow motors were all cataloged. An auction firm was engaged and within 75 days the secured creditor was paid in full. Unsecured creditors are poised to share in a pool of approximately $1.0 million.