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.
- 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.
- 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.