Restructured Company Gets Reorganization Plan Confirmed

Challenge

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Zeiger Crane leases a fleet of Manitowoc and Link-Belt Crawler Cranes ranging from 150-ton to 550-ton. $15 million sales. $16 million debt.

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• The crane rental and construction industry was adversely impacted by the real estate bubble.
• Overall, the construction industry declined in South Florida by 60%.
• Five major Florida crane and construction companies filed for bankruptcy protection in the preceding year.
• The company strained relationship with lenders by default and selling collateral without approval.
• The company rolled over assets every three years, which meant they had all new assets that were severely under utilized during the slowdown in business.
• The owner had personal guaranties on all significant debt and accounting and finance functions were very weak.

Solution

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• MorrisAnderson was engaged as Financial Advisor and Chief Restructuring Officer (CRO).
• Prepared a pre-bankruptcy restructuring plan to reduce debt and negotiate with lenders.
• Used the bankruptcy court to assist in the return of underutilized assets to vendors.
• Immediately reduced costs, renegotiated leases and surrendered assets with negative net values to the company.
• Worked with lenders to restructure debt payments to meet plan coverage.
• Negotiated surrender of equipment to reduce payments and reduce personal guaranty issues.

Results

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• Negotiated deals with all lenders who in turn gave 100% support of the reorganization plan.
• Reduced high priced financed equipment to a more reasonable lease purchase plan that allowed flexible return of under utilized assets.
• Eliminated owner’s personal guaranties and negotiated out over $2 million in potential avoidance actions.
• Saved company from liquidation and created a platform for stability going forward.