$25 million plumbing supply company and HVAC distributor. $5 million debt.
- Company saw revenues drop 40% over a two year period.
- Gross margin dropped 4% due to inefficient purchasing.
- Ineligible Accounts Receivable reached 43% of outstanding A/R.
- $2.5 million invested by ownership used up in a year to fund losses.
- Forced liquidation values showed a 60% loss for senior bank.
- Negotiated sale of business almost derailed by competitors holding unsecured claims filing Involuntary Bankruptcy petition.
- MorrisAnderson engaged initially as financial advisor, transitioned to interim management and investment banker.
- Negotiated additional terms with key vendors.
- Identified buyer, negotiated APA and sale of company.
- Sale conducted outside of Bankruptcy, until forced into Bankruptcy proceedings and then sold through §363 sale process.
- $2.6 million of inventory sold through consignment plan using eventual buyer to manage the process.
- Overall recovery increased 100% over liquidation through sale and organized liquidation efforts.
- Company survived what would have been a liquidation and 50 employees found employment with the new company.