Case Studies

Wind-down of Multi-State Trucker Company in Chapter 11 Pays Lenders 100%

J.S. Held Acquires Clark Seif Clark, Strengthening West Coast Capabilities for Environmental Claims, Disputes, and Catastrophe Response

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Home·Wind-down of Multi-State Trucker Company in Chapter 11 Pays Lenders 100%

The Situation

Trucking company (LTL) with locations across the East Coast. $200 million in sales. $60 million debt.

  • Fuel surcharges could not keep up with rapidly rising fuel prices, resulting in a lag time that cost over $3 million in a single month.
  • Rolling stock was scattered across the country.
  • The PE sponsor firm is unwilling to fund capital, and the bank group is unwilling to bear losses.
  • Increased competition, especially from the former owner, and rising fuel prices put extreme pressure on margins.
  • Combined with a recent purchase by a Private Equity firm that highly leveraged the company, a liquidity crisis ensued.
  • The bank group had concerns about the collateral's value and did not wish to continue funding losses.

How We Advised

Our experts worked with management to develop a restructuring plan.

  • With losses mounting, the company determined that liquidation was the only option, and it filed for Bankruptcy.
  • Our team and the company worked with employees to ensure the delivery of the product and the return of all rolling stock equipment.
  • By guaranteeing wages and most outstanding health care payments, the product was delivered, and the equipment was returned.
  • The orderly wind-down resulted in 100% of all equipment returned.
  • The auctions were highly successful, resulting in 100% of the secured creditors being paid.
  • Negotiated and settled L/C for Worker’s Comp and Liability for $750K increase in cash to the company.
  • The final resolution of the bankruptcy case became a famous Supreme Court case regarding the use of the Absolute Priority Rule.

Related Practice Areas

> Out-of-Court Wind-downs 
We deliver strategic guidance through the wind-down of business operations or underperforming assets, helping preserve value and reputation while avoiding the disruption, cost, and public scrutiny of formal bankruptcy. Our expert financial and operational advisors apply decades of experience providing exit solutions across a wide range of industries and complexities to deliver, and often execute, comprehensive solutions for distressed businesses. 

 

> 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. 

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