The following case study details an event in which a distressed sale was necessary to relieve the client of all trade debt and preserve all employee jobs during the transaction. Cascade’s Restructuring Team served as the exclusive financial advisor in this case.
Our Client
The Client is an Injection-Molded Plastics Manufacturer catering to Tier I automotive and furniture OEM customers. The Company has been facing losses for multiple years.
The Situation
The client had defaulted on senior debt, and the lender has informed the debtor of their intention to foreclose. Adding to their troubles, the lender’s collateral value was substantially less than its liquidation value. To further complicate matters, the owner was tired and somewhat combative.
The Solution
Cascade Partner’s Restructuring Team was engaged as a financial advisor, and the team was given a tight timeline to satisfy senior debt. Cascade’s first step was to complete a 13-week cash flow and negotiate a forbearance agreement to create time. Meanwhile, our Operations Team restructured the manufacturing operations and reporting, resulting in marginally profitable monthly performance. With these changes in place, a sale became the only option to satisfy senior debt in full.
Overall, we provided crucial support during the difficult time of a distressed sale. Our team was able to help improve the company’s financial situation and position it for a successful sale.
The Cascade Advantage
Our Restructuring Team successfully closed a sale to a strategic buyer, negotiating to save all jobs at the company. What’s more, our client was able to pay off the entire senior debt in full, which prompted the senior lender to become the lender to the buyer, ensuring a smooth transition. Additionally, the buyer assumed all trade debt.