Trucking company (LTL) with locations across the East Coast. $200 million sales. $60 million debt.
- Fuel surcharges could not keep up with quickly rising fuel prices, lag time cost over $3 million in a single month
- Rolling stock was scattered across the country
- PE sponsor firm not willing to fund capital and bank group not willing to fund losses
- Increased competition, especially from the former owner and rising fuel prices, caused extreme pressure on margins.
- Combined with a recent purchase by a Private Equity firm, who highly levered the company, a liquidity crisis occurred.
- The bank group had concern over the value of the collateral and did not wish to continue to fund losses.
- MorrisAnderson worked with management to develop a restructuring plan.
- With losses mounting, the company determined that liquidation was the only option and the company filed for Bankruptcy.
- MorrisAnderson and the company worked with employees to insure delivery of product and return of all rolling stock equipment.
- By guaranteeing wages and most outstanding health care payments, product was delivered and equipment returned.
- The orderly wind down resulted in 100% of all equipment returned.
- The auctions were highly successful, resulting in the secured creditors being paid 100%.
- Negotiated and settled L/C for Worker’s Comp and Liability for $750K increase in cash to the company.
- Final resolution of bankruptcy case became a famous Supreme Court case regarding the use of the Absolute Priority Rule.