Precision Machined Products Manufacturer – Chief Restructuring Officer (CRO) Case Study

Case Studies, Industrials Manufacturing, Industry Industrials Manufacturing, Transaction Restructuring, Transactions

Our Client

This Precision Machined Products Manufacturer had been struggling with losses over several years, despite serving automotive, heavy truck OEM, and Tier 1 customers.

The Situation

The company, with manufacturing facilities in Indiana, Kentucky, and Mexico, and headquarters in Michigan, was facing financial difficulties. The senior lender had blocked availability due to defaulted senior debts. In two-weeks’ time, there was a projected cash shortfall of $3 million, while there was an $850,000 borrowing base certificate (BBC) reconciliation issue. The private equity owner had attempted to hand over the keys to the senior lender, but with no success.

The Solution

The Board of Directors of the company has taken the decision to hire Cascade Partners’ Restructuring Team as the Chief Restructuring Officer (CRO) to execute the liquidation or sale of the business as a “going concern.” After completing a 13-week cash flow, the team corrected the BBC issue within two weeks and contacted four of the company’s largest customers. An Accommodation Agreement was successfully executed which established specific milestones and the sales process to be implemented. The revitalization plan was then broadly communicated to all company employees, and significant productivity and quality improvements were implemented in all three facilities, while executing a substantial reduction of HQ staff.

The Cascade Advantage

Cascade Partners’ Restructuring Team successfully completed a Section 363 sale to a strategic buyer, resulting in the retention of over 200 jobs that were at risk. Additionally, the senior lender was paid off in full.