MorrisAnderson Downsized Operations Result in Successful 363 Sale

Construction & Real EstateLitigation SupportPerformance ImprovementTurnarounds & Restructuring

25M

Annual Sales

125M

in Debt

General Crane, Pompano Florida

Challenge

Construction, Crane Rental. $25 Million Revenue. $125 Million Secured Debt. Housing and Commercial construction industry downturn in South Florida, revenue went from $100 Million down to $25 Million in one year.

  • The company had liquidity issues caused by rapid annual revenue decline from $100 million to $25 million and could not service debt.
  • The company had $125 million in secured debt spread among 10 secured lenders.
  • The company’s two owners did not get along and they did not have a workable go forward plan.
  • The company did not have an inventory system and interchangeable equipment was spread out in multiple locations and among multiple secured lenders.
  • The company filed Chapter 11 and immediately faced multiple relief of stay motions from secured lenders.
  • The company was bleeding over $150,000 a month in cash.

Solution

  • MorrisAnderson was hired as CRO to manage the Chapter 11 process.
  • Immediately made cost structure changes which allowed the company to maintain cash flow positive through the entire bankruptcy.
  • Created an inventory system and equipment accounting system so all parties could track specific assets.
  • Persuaded secured lenders to withdraw relief of stay motions and to support a sale process.
  • Relieved the two owners of management decision making and secured lender negotiations.
  • Created a utilization system and equipment evaluation process to isolated excess and idle assets.
  • Managed sale process, handled due diligence and negotiations with potential buyers.
  • Negotiated the turn back of excess equipment and negotiated with secured lenders for a go forward plan.

Results

  • The plan resulted in a cooperative return of excess equipment to lenders while keeping equipment that could be utilized heavily.
  • Restructured the company to profitability which resulted in the successful sale of the business.
  • Filed a full payout plan in the bankruptcy court fully supported by the secured lenders and creditors.

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