Case Studies

Wind-down of Steel Service Center

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 Steel Service Center

The Situation

$80 million in Revenue. $12 million debt. 3rd-generation , ISO/TS-registered, woman-owned business steel service center.

  • The Company sustained a substantial loss in its Inventory value when stainless steel prices dropped sharply, which materially impacted its profitability and the borrowing base for its line of credit, causing the company to be in loan default and over-advanced on its collateral.
  • The Company had several large-volume, thin-margin industrial customers (whose industries were also experiencing stress) whose supply contracts became unprofitable to the Company when the market plunged.

How We Advised

Our experts were engaged to work with management and downsize/integrate two processing facilities into one facility, and also review operations and other areas, including management realignment and customer rationalization/pricing, for potential revenue increases and cost savings to regain company profitability.

  • We led an aggressive realignment and successfully managed cash for nine months, eliminated the loan over-advance, and attempted to engineer an option for a successful return to profitability.
  • Given the continued weakness in steel pricing and the continued decline in sales, an orderly liquidation became the only practical option.
  • Our team successfully assisted the Company with its liquidation process, fully paying off the Senior Lender and providing additional recovery to the Unsecured Creditors.

Key Contact

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

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. 

 

> 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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