Representing Lender in Contentious Chapter 11

Schwab Ready Mix

Ft. Myers, Florida

Challenge

Ready-mix company with plants in Ohio and Florida. $200 million in annual revenues. $60 million debt. 


  • Senior secured lender group faced priming DIP financing and a “surprise” Chapter 11 filing.
  • Client was in severe liquidity crisis, but Real property and going concern valuations provided by debtor showed lenders to be over secured.
  • Senior lenders were shocked by filing and priming DIP plan.

Solution

  • MorrisAnderson was hired by the Senior lender group to evaluate the DIP filings and prepare a counter proposal.
  • Performed a comprehensive financial and business assessment to determine exit strategies and stakeholder returns.
  • Assessed business plans, financial projections and operational strategies.

Results

  • Business plan found to be inaccurate.
  • Going concern and liquidation valuations found to be over stated.
  • Lenders were shown to be seriously under collateralized.
  • Proposed plan of reorganization was unfeasible.
  • Provided expert testimony which won a reversal of the Court’s prior ruling to approve the priming DIP facility.
  • 363 sale process and coordination with the Unsecured Creditors’ Committee resulted in 50% improvement in estate value.