UCC Supports Company Plan of Reorganization and Creditors Get 100 cents

570M

Annual Sales

270M

in Debt

Accuride Corporation, Evansville Indiana

Challenge


Diversified manufacturer and supplier of commercial vehicle components to OEMs. $570 million annual sales. $270 million debt. Market leaders in six different segments with well-known brand names; Bostrom and Imperial. 2,450 employees.


  • Economic downturn reduced the heavy duty truck components market.
  • Sales declined over 40%; down from $1 billion to $570 million over 2 years.
  • Liquidity was insufficient to withstand the catastrophic sales decline which was substantially greater than during previous cyclical downturns.
  • Company filed bankruptcy in a prearranged capital restructuring.
  • Note holders received 98% of new equity.
  • Old equity received 2% of new equity plus warrants.
  • $140 million new debt rights offering.
  • Plan called for Unsecured creditors to be reinstated in full, however enterprise and warrant valuation dispute between secured debt parties and equity committee jeopardized creditor recovery.

Solution


  • MorrisAnderson was engaged as Financial Advisor to the Unsecured Creditors Committee.
  • Unsecured creditors needed sophisticated financial advice and analysis to understand constant changes to their potential exposure and to safeguard their interests.

Results


  • Unsecured creditors paid in full on pre-petition claims and retained good working relations with creditor post-emergence.
  • Plan was confirmed and made effective within 6 months of filing .
  • Company emerged from Chapter 11 bankruptcy protection in five months.
  • Chief Executive Officer indicated an improved financial structure will allow it to expand its product offerings.