Out of Court Sale/Winddown Nets a Great Recovery

Automotive & IndustrialFiduciary ServicesLitigation SupportTurnarounds & Restructuring

150M

Annual Sales

30M

in Debt

Drivesol Worldwide, Troy Michigan

Challenge

Automotive OEM provider of pedals and steering columns. $150 million revenues. $30 million of debt. Private Equity ownership.

  • Company was losing $6 million annually heading just as the automotive industry was to be bailed out by the US government.
  • Revenues were dropping daily.
  • Private Equity ownership group wanted to exit the business and stem losses.
  • $30 million senior secured debt and $10 million junior secured piece held by owners, believed to be collateralized, so ownership chose liquidation.

Solution

  • MorrisAnderson engaged by Private Equity to manage the liquidation process and maximize value.
  • MorrisAnderson engineered an “out-of-court” bankruptcy.
  • Surcharge implemented resulting in $14 million over five months (U.S. and Sweden).
  • Trade creditors ($14 million) organized into an informal committee with counsel.
  • Three entities sold; Sweden and China as stock sales, CT plant as an asset sale.

Results

  • Secured lender paid out 100% in 105 days.
  • Junior secured lender received 70%, despite no mortgages on real property.
  • Unsecured claimants received 33%.
  • Professional fees under 50% of the cost of Chapter 11.
  • No disruption of service to OEMs on mission-critical safety parts.
  • Net Value Recovery $10 million more than a Chapter 11.

Contributors