Turnaround Allows for Refinancing

Metro Financial Services

Dallas, Texas

Challenge

7th largest commercial receivables-based financing company in the US. $600 million in purchases per year. $60 million average portfolio size. $10 million annual sales. $50 million debt.


  • The Company was the 7th largest commercial receivables-based financing company in the USA, providing over $600 million of purchases per year with a $60 million receivables portfolio.
  • After an external fraud wiped-out the Company’s equity, the company’s lenders entered into a forbearance agreement which required (1) a Chief Restructuring Officer to run operations, (2) an infusion of outside capital and (3) refinancing of the existing credit facility.
  • The company also required a third party review of its internal underwriting and credit policy procedures and fixed costs.

Solution

  • Ownership engaged MorrisAnderson as CRO and as investment banker to refinance senior secured debt, raise equity capital and/or sell the business.
  • Morris Anderson implemented an employee reduction program of 25%, a concurrent quality improvement plan in certain key positions, a portfolio review and clean-up, a complete revamping of the credit process, and a selective client portfolio optimization process.
  • Challenges included lenders with differing interests, two lenders with a 100 cent basis and a third with a 72 cent basis, and management that did not want the recapitalization and fought the process after the business operated profitably.

Results

  • The Company returned to operating profitably within 90 days.
  • MorrisAnderson secured a $50 million three year credit facility and a change of control infusion of $8 million of new equity capital.
  • Prior ownership remained in the capacity of executive management with an ongoing share of future profitability.
  • The company is now called Greystone Commercial Services, LP.

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