Case Studies

Financial Advisor to Distressed Tree Trimming Company

J.S. Held Acquires Chicago-based Turnaround and Restructuring Firm MorrisAnderson

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The Situation

Our team achieved a 100% recovery for a senior secured creditor after its borrower, a 15-year-old tree trimming company, faced insolvency when a key customer, comprising 70% of its revenues, went bankrupt. The equipment-intensive, leveraged business immediately became non-compliant with its loan covenants and failed to pivot operations to generate cash through equipment sales or leases.

How We Advised

Concerned about the company’s viability, the senior secured lender recommended hiring a financial advisor and introduced our team. We quickly evaluated the company’s operations and assets to design and implement a recovery plan. Our key actions included:

  • Identifying excess equipment that could be sold or leased to generate essential liquidity and reduce its heavy debt service payments;
  • Negotiating forbearance agreements with the senior lender, allowing time to implement the successful sale of equipment and restructure debt;
  • Advising management to retain an equipment liquidation broker and analyzing equipment values and sale prices;
  • Managing the liquidation process to maximize proceeds from the equipment, resulting in a 70% reduction in debt service;
  • Paying down equipment loans and negotiating to refinance the balance with a new lender;
  • Securing mortgage refinancing on the company’s office building;
  • Repaying the company’s line of credit in full using proceeds from equipment sales and refinancings, mortgage refinancing, and operating cash flow;
  • Creating reasonable cash flow projections and delivering timely reporting to the senior lender; and
  • Restructuring the company to achieve positive cash flow, enabling long-term viability and growth.

Our Solutions

  • Identifying and implementing methods to generate essential cash flow.
    • Our team identified excess equipment that could be sold or leased and then analyzed the equipment’s value and projected sales prices.
    • We convinced management to retain an experienced equipment broker and led the process of effectively selling equipment.
    • Our experts introduced and successfully negotiated with a new lender to refinance the company’s remaining equipment.
  • The company’s senior secured lender was frustrated with management for failing to pivot the business to generate cash flow after losing most of its revenues.
    • After gaining management’s trust, we collaborated to establish reasonable cash flow projections.
    • Our team presented a strategic plan and cash flow projections to successfully negotiate a forbearance agreement with the senior secured lender.
    • We provided timely reporting to inform the lender about progress pursuant to the strategic plan.

Key Contact

David Stapleton
Senior Managing Director
Strategic Advisory Practice
+1 213 235 0601
[email protected]

Related Practice Areas

> Bankruptcy Advisory / Alternatives to Bankruptcy
When considering alternatives such as bankruptcy, you need a team with decades of experience helping leaders sitting in your exact seat to yield the best outcome for lenders, creditors, shareholders, and employees. Choosing the best path to resolve a company’s unique challenges requires detailed analyses, collaborative communication, and a complete understanding of the client’s goals and objectives.

> Turnaround & 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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