In February 2018, we discovered that a key competitor purchased an unsecured creditor’s debt and with the cooperation of two other unsecured creditors that they solicited, the group forced an involuntary bankruptcy.
In March 2018, TPMA and Company ownership engaged Bradshaw law firm, Des Moines, IA as debtors counsel. Immediately, The Company filed a petition for Reorganization under Chapter 11, Title 11. The involuntary bankruptcy filing was dismissed.
TPMA was re-engaged as CRO and financial advisors along with debtor’s counsel. We attended and advised on Court hearings and with Court approval, retained the investment banker. We continued oversight of the Company operations, financial condition and Banking relationships including DIP financing.
It was agreed between debtor’s counsel, the Company and TPMA to conduct a Section 363 auction and secure a stalking horse bidder. Initially, the potential buyer agreed to stay in the deal as the stalking horse but unfortunately dropped out given the participation of the above competitor. Fortunately, the investment banking process yielded a local buyer as the stalking horse.
Ultimately the Company assets were sold via auction to the local buyer and on July 28, 2018, and all 225 employees were re-employed by the new Company.
The Bank decided to finance the new Company and remains the lender to The Company. It continues to operate today with an additional approximately $6M in new cash. And no major customers were lost in this process.
Twists and Turns
We experienced many twists and turns in this turnaround but in the end the Company is operating with full employment as the two hundred plus employees retained their jobs and lost no major customers.
This engagement won Turnaround go the Year in 2019.