MorrisAnderson Selling Company to Repay Lender
75M
Annual Sales
25M
in Debt
Pettit Oil, Tacoma Washington
Challenge
Convenience Stores, and Bulk Oil Distribution. $75 Million Revenue. $25 Million Secured Debt.
- Company purchased an unprofitable company and was over leveraged
- Heating oil division was very unprofitable and management had no plan to fix the business
- Unprofitable supplier distribution contracts
- Excess bulk operations and equipment
- Inventory control issues
- Filed for Chapter 11 without getting cooperation from its secured lender
- Attempted to negotiate a sale without professional assistance or providing adequate due diligence materials
Solution
- MorrisAnderson was retained by the secured lender to evaluate loan compliance and monitor bankruptcy process
- Determined that a company led bankruptcy sale process was unlikely and advised the secured lender to prepare for a relief from stay to foreclose on all collateral
- As predicted, sale efforts fell through and MorrisAnderson took over the business through a relief from stay
- Immediately retained key employees, initiated an organized sale process and marketed assets for sale
- Complete a system-wide inventory and accounting of all fuel inventory and negotiated sales of convenience store and card lock facilities
- Negotiated supplier agreement settlement and resolution of claims
Results
- Sold all divisions, assets and inventory over a four month process
- Negotiated settlements and other claims to mitigate offset charges against the secured collateral
- Assisted with mediation and other litigation against secured lender
- Through the process, MorrisAnderson achieved a 100% payback on the secured debt for the lender
