Case Studies

Turnaround Saves $40M for Lender

J.S. Held Acquires Shechter & Everett to Expand Forensic Accounting Capabilities for Family Law Disputes in Florida

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Home·Turnaround Saves $40M for Lender

The Situation

Lighting maintenance contract service provider. $35 million in sales. $80 million debt. 2,000 contracts across 30,000 locations in 40 states. The secured lender had $80 million loan secured by a contract with a recurring monthly review.

  • The company was cash flow negative as costs to provide maintenance exceeded contractual revenue from bundled equipment sales, amortization, and maintenance fees.
  • The company filed Chapter 11 to prevent and/or delay lender foreclosure on contract collateral.
  • 30% of accounts had delinquent payments and unsatisfied maintenance service orders.
  • Lender assessed collateral value was under $20 million on a $80 million loan.

How We Advised

Our experts assisted the lender in obtaining relief from the Automatic Stay in Chapter 11, taking control of contract collateral, and beginning to service contracts.

  • Created a Special Purpose Entity to own the contract assets.
  • Set up a new company to service contracts, including:
    • Creation of 3 integrated IT databases (contracts, service, and billings).
    • Establishment of 100% outsourced service capability
    • Creation of a call center to handle customer service calls
  • Personal visits to all major dollar delinquent customers to re-establish service and payments.
  • Re-established maintenance service and current payments on over 95% of the customer base.
  • Created over $10 million of annual cash flow business.
  • Sold the business 2 years later to a major competitor, and the Lender recovered $40 million more (2X) on its loan than original expectations.

Related Practice Areas

> Bankruptcy Advisory 
Navigating bankruptcy is inherently complex, often involving struggling businesses, litigation, incomplete or inaccurate financial records, potential fraud, and other challenges, in addition to strict court-mandated processes. Our experienced team of turnaround and restructuring experts seamlessly guides clients throughout the process to optimize outcomes for lenders, creditors, shareholders, and employees. 

 

> 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. 

Key Contacts

For additional information about the engagement or to learn more about our services, contact:

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