National Home Building Materials Distributor

Situation

  • Advised the senior secured lender group of a national home building materials distributor and contractor with $550 million of debt
  • Significant reduction in revenues due to financial crisis in sub-prime home building market
  • Widening unexplained losses from operations
  • Over $115 million in letters of credit at risk of default
  • Growing accounts receivable collateral

Execution and Results

  • Provided an assessment of the Company's actual financial performance as well as its business projections and turnaround plan
  • Assessed the Company's short-term cash flows and working capital requirements
  • Provided the lender group with options and recommendations concerning a financial and operational restructuring of the Company
  • Developed analyses for assessment of a debt-for-equity swap vs. sale of company
  • Assisted the lender group in negotiating a pre-packaged bankruptcy plan with the Company and its other stakeholders
  • Negotiated DIP and exit financing terms and pricing on behalf of the lender group
  • Worked with management and the board of directors to ensure a successful reemergence from bankruptcy and protection of the lender group collateral

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