New Business Plan Used for New Equity and Debt Restructuring

Encore Legal Solutions

The Woodlands, Texas

Challenge

$30 million e-Discovery business for large litigation cases. $15 million debt.


  • Big declines on the paper side of business over prior several years.
  • E-Discovery side of business growing 50% annually.
  • Equity wanted to invest for growth but debt investor held a blocking position.
  • Encore had built up $30 million revenue business around the emerging growth e-Discovery business.
  • Their growth strategy was a combination of purchasing local paper discovery providers and growing their electronic resources through development or purchase.
  • Total spending required to attain the next set of objectives was $9-10 million.
  • Equity saw the potential but the mezzanine lender held a blocking position.

Solution

  • MorrisAnderson was brought in by the equity sponsors to evaluate the next tranche of investment and opportunities to negotiate with the mezzanine lender.
  • MorrisAnderson worked with management to develop a business plan to focus on the e-Discovery side of the business without losing the leverage of the paper business.

Results

  • Morris Anderson negotiated a deal with the mezzanine lender and a restructuring of the senior debt that allowed $5 million of new equity to come into the company to provide funds for necessary investments in technologies, sales personnel, working capital and a pay down of the mezzanine debt.

Daniel F. Dooley

Dan Dooley, CTP, is a Principal and CEO at MorrisAnderson based out of Chicago. He has a strong national reputation in crisis management, operations improvement, debt refinancing/restructuring and C-level positions. He is a frequent speaker at industry conferences and a regular author for industry periodicals. Dan has served on the Board of Directors of both… Read More