UCC Assists Creditors on Getting Payment Plan
19M
Annual Sales
13M
in Debt
Thornwood Manufacturing, Phoenix Arizona
Challenge
Manufacturer of oak and hardwood furniture. $19 million sales. $13 million debt.
- Following the Great Recession, company revenue fell from almost $40 million to $19 million.
- During the same time period operating income declined from $500K to a loss of over $2.0 million and EBITDA fell from approximately $1.0 million to a negative $1.2 million.
- Company filed Chapter 11 proceedings in an attempt to re-organize the business.
Solution
- MorrisAnderson acted as the financial and operations advisor for Unsecured Creditors Committee (UCC)
- MorrisAnderson retained to validate the company’s Plan of Reorganization and determine the optimal strategy to maximize return to the unsecured creditors.
- MorrisAnderson determined due to market conditions the company’s liquidation value was insufficient to cover the secured first position lien holders and lender.
- MorrisAnderson developed a strategy to support the ongoing business of the company on CIA basis while unsecured creditors received monthly payments to pay down old receivables or receive a one-time lump sum settlement.
Results
- The company operated under the umbrella of a confirmed Chapter 11 Bankruptcy Plan and honored the terms of the unsecured creditor’s payout plan.
