Insights
J.S. Held Acquires GLI Advisors, Strengthening Our Construction Project Support Services in the Western US and Hawaii
Read MoreAn Assignment for the Benefit of Creditors (ABC) can be the most prudent fiduciary action by a distressed company’s board of directors. The benefits of ABCs compared to Chapter 7 and Chapter 11 bankruptcies, receiverships, and other out-of-court restructuring methods include:
Consider this recent engagement where Stapleton Group served as Assignee:
A $50 million, private equity-backed international textile recycling company with operations in the United States and Central America had become illiquid due to substantial increases in freight costs and a poor product mix from a new key supplier. It was out of compliance with loan covenants and lacked cash-on-hand to pay creditor obligations.
In an effort to restructure the business, two operating facilities were sold with proceeds used to pay back the company’s secured lender in full, and a third was closed. The company’s board of directors then opted to wind-down operations through an ABC rather than continue funding operations.
As Assignee, our team discovered significant accounts receivable on the company’s books without a recovery plan, and the lack of a realistic budget with projected recovery for the company’s remaining creditors.
We successfully recovered an additional 20% over the amount generated by selling facilities by:
The recovery through the ABC was used to pay down obligations to the second priority secured lender.
We would like to thank our colleague, Jake DiIorio, CTP, for his insights and expertise that greatly assisted this research.
Jake DiIorio, CTP, is a Managing Director in J.S. Held’s Strategic Advisory practice. He joined the company in October of 2024 as part of J.S. Held's acquisition of Stapleton Group. Jake is a seasoned restructuring expert and court-appointed fiduciary and is instrumental in resolving complex turnarounds, receiverships, and loan workouts for operating businesses and real estate entities. He designs and implements strategies to repair fractured relationships between debtors, creditors, and other stakeholders to achieve the best outcomes for all parties involved. Jake applies his extensive experience as a fiduciary to manage projects ranging from solvency analyses to comprehensive receiverships and Chapter 11 restructurings. Prior to joining the Stapleton Group, he was a senior auditor at Ernst & Young in New York, NY, specializing in valuation analysis for Fortune 500 companies across multiple industries.
Jake can be reached at [email protected] or +1 213 235 0609.
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