UCC Supports Company Plan of Reorganization and Creditors Get 100 cents

Challenge

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Diversified manufacturer and supplier of commercial vehicle components to OEMs. $570 million annual sales. $270 million debt. Market leaders in six different segments with well-known brand names; Bostrom and Imperial. 2,450 employees.

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• Economic downturn reduced the heavy duty truck components market.
• Sales declined over 40%; down from $1 billion to $570 million over 2 years.
• Liquidity was insufficient to withstand the catastrophic sales decline which was substantially greater than during previous cyclical downturns.
• Company filed bankruptcy in a prearranged capital restructuring.
• Note holders received 98% of new equity.
• Old equity received 2% of new equity plus warrants.
• $140 million new debt rights offering.
• Plan called for Unsecured creditors to be reinstated in full, however enterprise and warrant valuation dispute between secured debt parties and equity committee jeopardized creditor recovery.

Solution

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• MorrisAnderson was engaged as Financial Advisor to the Unsecured Creditors Committee.
• Unsecured creditors needed sophisticated financial advice and analysis to understand constant changes to their potential exposure and to safeguard their interests.

Results

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• Unsecured creditors paid in full on pre-petition claims and retained good working relations with creditor post-emergence.
• Plan was confirmed and made effective within 6 months of filing .
• Company emerged from Chapter 11 bankruptcy protection in five months.
• Chief Executive Officer indicated an improved financial structure will allow it to expand its product offerings.