Restructuring Advisors

Manufacturing Company

Industry: High Tolerance Precision Manufacturing
Region: Nationwide Operation
Revenue: $20 million
Expertise: Complex wind-down and disposition of assets

The Challenge:

Continuously operating for 43 years the family owned business suffered from dwindling revenues over a three-year period. The organization had been transitioning from second generation to the third. The new team made significant strategic changes and had rapidly moved away from long-term clients who were experiencing a growth cycle. Lacking the wisdom and experience to understand the devastating impact the failed strategy was having on the business, they continued to push forward wiping out all cash on hand as well as funds available through their line of credit.

Actions:

Out of cash and with no new funding available the family members gathered and determined that in its current condition no significant business operations remained. Attempting to restore relationships with former clients would be time consuming and costly. After conferring with a trusted legal advisor it was determined the right action to take was to file an Assignment for the Benefit of Creditors (ABC) and close down all business operations.

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 this case. Burritt was selected due to his familiarity with the Assignment for the Benefit of Creditors process and his success in this managing other cases to a positive outcome. Appraisals completed on the manufacturing equipment confirmed that the estimated recovery value should exceed the loan value of the secured creditor. A public sale was planned, all legal notices and ABC related requirements for an Assignment for the Benefit of Creditors were followed. Within 90 days the secured creditor was paid in full and the unsecured creditors shared in the remaining cash assets.