Avoiding Bankruptcy: How a Struggling Business Achieved a Managed Exit
Avoiding Bankruptcy: How a Struggling
Business Achieved a Managed Exit
The Assignment
A design and engineering firm faced severe financial challenges with an overwhelming creditor stack, including more than ten subordinated creditors. Initially considering a Subchapter V bankruptcy filing, the company’s potential buyer was opposed to bankruptcy and instead explored a capital injection and negotiated settlements with creditors. Seeking expert guidance, the company engaged Kreshmore Group to assess its restructuring.
The Process
Kreshmore Group conducted a thorough financial analysis and provided strategic counsel on the best path forward:
- Bankruptcy Feasibility Assessment: Determined that the company’s financial situation was too dire for outside investment and advised against injecting personal bankruptcy protected funds into the company.
- Pivot to Out-of-Court Liquidation: As the company prepared for bankruptcy, the owner ultimately decided to forgo filing and instead pursue an orderly liquidation outside of court.
- Creditor Negotiations & Lender Forbearance: Assisted in communications with multiple creditors and successfully worked out forbearance agreements with the senior lender.
The Results
Through Kreshmore Group’s strategic guidance, the company successfully liquidated outside of bankruptcy, ensuring a controlled wind-down of operations. The senior lender achieved a full recovery, while creditor communications were effectively managed, mitigating further financial and legal complications for ownership.
As a boutique restructuring advisory and investment bank, we specialize in guiding middle-market companies through pivotal transitions. For tailored support and expert insights, connect with one of our experienced advisors below.
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