MA Successfully Completes Complex Chapter 11 Exit and Turnaround for ITC
MA led a 16-month bankruptcy process which resulted in a consensual Plan of Reorganization, accounting department upgrade, dispute resolution between the owner and his ex-partner, and $33 million of new exit financing.
Headquartered in Phoenix, ITC is a steel wire shelving and wire racking systems manufacturer, primarily for commercial and industrial warehouse racking systems. As one of the few remaining companies in the industry, ITC continues to gain market share and perform at an elite level from its two plants located in Phoenix and Columbus, Ohio.
Due to a series of issues that included operational inefficiencies, liquidity constraints (after expansion of the Columbus plant) and poor financial leadership, the Company defaulted on several bank covenants, ultimately propelling ITC into a bankruptcy in November 2015.
ITC engaged MA in January 2016, initially to handle the bankruptcy proceedings, cash flow requirements and unsecured creditor negotiations. The project quickly grew to include MA Director Mark Briden assuming the interim chief financial officer role. Briden, along with MA Principal and CEO Dan Dooley, immediately evaluated and implemented a comprehensive internal restructuring of ITC’s financial operations and personnel to solidify the Company’s financial structure, then aggressively moved forward to build a financial plan and source exit financing allowing the Company to emerge from bankruptcy.
While negotiating the exit financing package and securing approval from the court on the plan of reorganization, MA also assisted in negotiating a peaceful resolution to a dispute between the Company’s owner and his ex-partner.
On Feb. 28, 2017, the Company emerged from bankruptcy, providing full payouts to secured creditors, a 100% payout option for unsecured creditors or a 61% cash out option (saving ITC $2 million) and the original owner maintained 100 percent equity in the Company. In total, MA facilitated $40+ million in secured and unsecured debt restructuring and ITC moves forward in an operationally and financially sound position, poised for a successful future with new financial partners and an expanded management team.
Professionals who worked on the transaction include:
- Mark Briden, Tim Shaffer and Dan Dooley of MorrisAnderson, financial advisor and investment banker to the Company
- Warren Stapleton of Osborn Maledon, counsel to the Company
- Dale Schian and Scott Goldberg of Schian Walker, counsel to the shareholder
- Tom Salerno and Chris Simpson of Stinson Leonard Street, counsel to the UCC
- Bryan Perkinson of KrysGlobal, financial advisor to the UCC
Headquartered in Chicago, MorrisAnderson is a middle-market consulting firm focused on underperforming and distressed companies. The firm's service offerings include financial advisory, interim, turnaround and crisis management, investment banking, performance improvement and litigation support. MorrisAnderson emphasizes hands-on involvement, consistent and reliable communication and a collaborative approach with stakeholders.
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