Case Studies

Assisting Receiver with Sale Process

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The Situation

Metals Machine Shop. $16 million in revenues. $10 million debt.

  • A $2 million-plus loss for two years in a row.
  • The Company was losing approximately $200,000 per month when the decision was made by the Private Equity Sponsor and the lender to place the Company into Receivership. The Goal was to maximize recovery for creditors by (1) operating the business and conducting a sale.
  • process to sell the Company as a going concern, or (2) to liquidate the business and hold an equipment auction.
  • A machine shop that was heavily concentrated in mining, oil, and gas, two industries in a serious downturn.
  • The private equity sponsor is no longer capable or interested in putting more capital into the business to support the losses.
  • Bank relationship eroded. Sponsor and lender agreed to put the Company into Receivership and either sell as a going concern or liquidate.
  • The challenge was to convince the lender that their recovery would be higher by conducting a going-concern sale than through an equipment liquidation, and that over 70 jobs would be saved. A liquidation would have produced at least a $1 million WARN Act exposure, which was mitigated by operating the business.

How We Advised

  • The decision was made to operate as a going concern and to conduct a sale process, leading to an auction of the business either as a going concern or the sale of individual assets. The target Sales price was $7 million.
  • The sale process was conducted over a 70-day period, during which the Company operated on its own cash. Over 75 interested parties completed non-disclosure agreements. At the auction date, a stalking horse offer had not been accepted.
  • At the auction, there were 10 bidders, 5 for the going concern and 5 auctioneers bidding on equipment and receivables.
  • The high bidder purchased the company as a going concern for $6.75 million, saving over 70 jobs. The recovery was estimated to be $1 million higher than a liquidation would have produced. This process was significantly faster and cleaner than a liquidation and equipment auction sale.

Key Contact

Dan F. Dooley, CTP 
Senior Managing Director 
Strategic Advisory Practice 
+1 603 660 8952 
[email protected] 

Related Practice Areas

> Receiverships 
Federal and state courts, creditors, and legal counsel choose our team to serve as Receiver of distressed businesses and real estate entities. We stabilize operations and cash flow, safeguard business assets, and pursue methods to maximize financial recovery. Our multidisciplinary team applies a wide breadth of restructuring and industry experience as Receiver to take control of companies facing financial, operational, and legal issues.

 

> Turnaround and Restructuring Services 
Navigating the many challenges confronting a company in transition requires an operationally focused approach that looks beyond the balance sheet to minimize further degradation and build a path to sustainable growth. Drawing upon decades of experience in the turnaround space, we help companies in transition identify practical strategies to improve profitability and liquidity for immediate relief, while concurrently developing and executing a comprehensive turnaround plan for long-term, sustainable value creation. 

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J.S. Held

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50 Jericho Quadrangle
Suite 117
Jericho, N.Y. 11753
+1 516 621 2900
[email protected]

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© 2025 J.S. Held LLC.  

All Rights Reserved.

J.S. Held, its affiliates and subsidiaries are not certified public accounting firm(s) and do not provide audit, attest, or any other public accounting services. J.S. Held is not a law firm and does not provide legal advice. Securities offered through PM Securities, LLC, d/b/a Phoenix IB or Ocean Tomo Investments, a part of J.S. Held, member FINRA/SIPC. All rights reserved.
J.S. Held

Headquarters

50 Jericho Quadrangle
Suite 117
Jericho, N.Y. 11753
+1 516 621 2900
[email protected]

J.S. Held, its affiliates and subsidiaries are not certified public accounting firm(s) and do not provide audit, attest, or any other public accounting services. J.S. Held is not a law firm and does not provide legal advice. Securities offered through PM Securities, LLC, d/b/a Phoenix IB or Ocean Tomo Investments, a part of J.S. Held, member FINRA/SIPC. All rights reserved.
Markets Served

Geographies

Industries

Media Relations

[email protected]

 

© 2025 J.S. Held LLC.  

All Rights Reserved.

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