Orderly Wind Down of Steel Service Center

Industry: Steel & Plastics

Southline Steel Industries

Bessemer, Alabama

Challenge

Steel service center. $50 million sales. $10 million debt.


  • The Company lost over 40% of its business due to the recession, was losing money, and was unable to pay its bills.
  • The Company’s steel suppliers began dropping prices in order to sell their own inventory and they began to sell to the Company’s customers direct.
  • The Company’s shareholders concluded that the business was not viable and they desired to liquidate the business out of courtwithout the expense of a bankruptcy.

Solution

  • Morris Anderson was brought in to develop a liquidation plan that would be supported by the Company’s lenders.
  • Morris Anderson worked with the Company team to execute its plan to sell the inventory for the highest amount possible, to collect accounts receivable and to hold an equipment auction.
  • Morris Anderson communicated with the banks and the largest unsecured creditors to keep them informed of the progress of the liquidation.

Results

  • The liquidation of the Company occurred out-of-court without the cost of a bankruptcy filing.
  • Over $10 million of secured debt with two banks was retired in full.
  • Over $1 million was available for distribution to unsecured creditors.