Restructuring Advisors

General Time Corp. & GTC Properties Inc.

Company: General Time Corp. & GTC Properties Inc.
Industry: Consumer Goods & Manufacturing
Region: United States, Canada, Great Britain, China
Revenue: $100 million
Services: CRO – Chapter 11 wind-down, liquidation, asset sale

The Challenge

The world’s largest provider of clocks and owner of the many of the most respected and well-known brand names in the industry had not reacted to market and customer demands and the need to provide lower-cost manufacturing. The company was in a highly competitive market with cost issues and overwhelming debt load.

Our Actions

Jim Burritt, managing partner of Restructuring Advisors completed an assessment of the company and delivered a recovery analysis that defined estimated values that could be realized from the sale of the intellectual property, inventory and company assets. Cash flow forecasts, operating budgets and wind-down resource requirements were also established. Manufacturing operations were consolidated and WIP build out scenarios were completed to maximize the value of inventory on hand. A Chapter 11 filing was submitted to the Northern Georgia bankruptcy court. On a concurrent basis Burritt and team negotiated a DIP facility that allowed the company to continue to operate during the bankruptcy proceedings. The team from Restructuring Advisors worked through the company’s primary customers to sell on hand finished good inventory at a 36% gross profit.

On a concurrent basis an Offering Memorandum was prepared and distributed that created 30 qualified prospective buyers. Working with the bank group, equity sponsors and creditor’s committee counsel, Burritt and his team managed the wind-down of the company including collection of more than $15 million in receivables. Company facilities in Canada, Great Britain and China were closed while meeting the strict employee termination laws within each of the countries.

The Results

Intellectual property including the brand names were sold to multiple buyers at an eight figure value. Inventories were sold through primary retail outlets while the receivables continued to be collected. The manufacturing equipment and office assets were sold through an auction process. The recovery amount realized by Restructuring Advisors was $47 million. This compares to a $24 million offer the company received to be sold as a going concern.