Sold Companies as Going Concern After Their Shut Down

Industry: Steel & Plastics

Ingersoll International

Rockford, Illinois

Challenge

Custom machine toolmaker. $200 million sales. $42 million debt.


  • Company operating in Chapter 11, out of cash
  • $42 million in senior debt, assessment by banks was $20 million under water, $30 million owed to trade creditors, $34 millionin underfunded pensions
  • Company faced shut down and last of two potential buyers just bowed out of negotiations
  • Underfunded pension

Solution

  • MorrisAnderson engaged as financial advisor to sell assets and liquidate Company
  • Development of an operating plan that was cash positive and preserved the sale option and avoided immediate liquidation
  • Negotiated with customers to fund build out and maintain going concern value of business

Results

  • Stock of German subsidiary sold for $45 million paying off senior debt
  • Structured sales of three operating units raised $24.6 million which funded the PBGC $20 million and provided a $3 million (10%) payout to the unsecured creditors
  • $40 million increase over expectations at the time of the filing