Downsized Operations Result in Successful 363 Sale

General Crane

Pompano, Florida

Challenge

Construction, Crane Rental. $25 Million Revenue. $125 Million Secured Debt. Housing and Commercial construction industry downturn in South Florida, revenue went from $100 Million down to $25 Million in one year.


  • The company had liquidity issues caused by rapid annual revenue decline from $100 million to $25 million and could not service debt
  • The company had $125 million in secured debt spread among 10 secured lenders
  • The company’s two owners did not get along and they did not have a workable go forward plan
  • The company did not have an inventory system and interchangeable equipment was spread out in multiple locations and among multiple secured lenders
  • The company filed Chapter 11 and immediately faced multiple relief of stay motions from secured lenders
  • The company was bleeding over $150,000 a month in cash

Solution

  • MorrisAnderson was hired as CRO to manage the Chapter 11 process
  • Immediately made cost structure changes which allowed the company to maintain cash flow positive through the entire bankruptcy
  • Created an inventory system and equipment accounting system so all parties could track specific assets
  • Persuaded secured lenders to withdraw relief of stay motions and to support a sale process
  • Relieved the two owners of management decision making and secured lender negotiations
  • Created a utilization system and equipment evaluation process to isolated excess and idle assets
  • Managed sale process, handled due diligence and negotiations with potential buyers
  • Negotiated the turn back of excess equipment and negotiated with secured lenders for a go forward plan

Results

  • The plan resulted in a cooperative return of excess equipment to lenders while keeping equipment that could be utilized heavily
  • Restructured the company to profitability which resulted in the successful sale of the business
  • Filed a full payout plan in the bankruptcy court fully supported by the secured lenders and creditors

Mark J. Welch

Mark J. Welch, CPA, CTP is a Principal at MorrisAnderson based in Pittsburgh. He has over 20 years in bankruptcy and restructuring experience especially in leadership roles and fiduciary positions with clients. Prior to joining MorrisAnderson, Mark was the Director of Internal Audit at Southern Air Transport, Inc., a mid-sized cargo air-transport airline. He also… Read More