Fixing Environmental Issues Leads to Going Concern Sale

OGM - Clean Water Ltd.

Columbus, Ohio

Challenge

3 Waste Water Treatment facilities. $25 million Revenue. $10 million Secured Debt. Environmental and Liquidity Issues. Ohio State Court Receivership.


  • Waste water treatment company that removed impact oil and other material from water and through other treatment methods
  • Reclaimed oil sales, a byproduct of treatment, was effected by falling oil prices
  • Numerous potential environmental issues and regulatory violations that needed immediate attention
  • Lack of liquidity and concerns by the secured lender caused the company to enter into a state receivership proceeding
  • Customers were exiting because of the receivership
  • Critical safety equipment and environmental barriers where failing

Solution

  • MorrisAnderson stabilized the company through cost cutting, elimination of oil operations and other selective sales efforts
  • Stabilized exit of customers and maintained consistent revenue through the entire 2 years of receivership
  • Negotiated and resolved all active violations and implemented corrective actions for environmental regulators including the EPA, RCRA and local agencies
  • Replaced environmental equipment deficiencies and implemented capital improvements to correct failing critical safety equipment
  • Conducted a sales process and brought three potential strategic buyers to the secured lender

Results

  • Secured lender purchased the company with a credit bid
  • The company was sold with no outstanding environmental violations
  • Avoided potential costly environmental remediation and facility shut down risk for the buyer/lender

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