Sale of Trucker and Out of Court Wind Down of Estate
200M
Annual Sales
20M
in Debt
Tango Transport (Gorman Group), Shreveport Louisiana
Challenge
Regional long-haul trucker covering 15 states. $200 million revenue. $20 million debt.
- Company was losing $8 million annually, secured lender was demanding an exit and tractor lessors had started repossessing vehicles
- Company’s service area was greater than it could cost effectively service
- Tractor and driver utilization were very poor
- Tractor maintenance and uptime were serious problems
- Pricing was inadequate and below market
- Cost structure was too high
- Immediate Chapter 11 seemed to be the only option
Solution
- MA hired as CRO
- Quickly develop turnaround plan to reduce service area, cut fleet size/return leased assets, increase prices, cut costs and refinance out secured lender
- Develop cash forecast to provide partial payments to lessors to give turnaround plan time to work
- Get secured lender and major lessors buy-in
Results
- Secured lender refinanced
- One-third of leased assets returned
- Company was sold without need for bankruptcy filing
- New secured lender was fully paid with significant recovery by unsecured creditors
