Restructuring Advisors

Michels South Carolina, Inc.

Company: Michels South Carolina, Inc.
Industry: Durable Goods Manufacturing & Distribution
Revenue: $25 million
Region: Southeast
Services: Interim Management – Wind-down, Liquidation & Asset Sale

The Challenge

Michels South Carolina, Inc., manufactured and distributed furniture products under a variety of regional brand names across the eastern half of the country. The company also provided private label bedroom and dining room suites to large retailers on a nationwide basis. The company struggled with the challenges associated with operating a low margin business in an industry where most manufacturing operations had moved off-shore. The company’s attempt to change from a high throughput shop to one that operated shorter runs with enhanced product customization failed due to outdated equipment and a lack of capital to support the strategic initiative.

Our Actions

After working with senior company leadership on-site, and in cooperation with the secured lender, Jim Burritt, managing partner at Restructuring Advisors created a recovery valuation analysis that provided the parties with a forecast on recovered cash and an operating budget. During the first week the facilities were secured, account receivables, inventories and machinery assets were all verified. Within two weeks payrolls had been reduced by 92%. Burritt and his team identified synergistic buyers who could provide the best return for both raw materials and WIP that could be transferred to other design concepts. Receivable collections were ongoing while the Restructuring Advisors team managed the auction process for the manufacturing, warehousing and office products and systems.

The Results

Within 90 days, the business lines, inventory and fixtures were sold. Receivable collections were completed within 120 days and the building was sold a short time later for a respectable value. Recovered proceeds exceeded the secured creditor’s expectations.