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MCA Leads Chapter 11 Process To Rightsize Company For Subsequent Sale

By February 3, 2023Insights

MCA Financial Group led its client through a Chapter 11 process to complete the successful rightsizing of operations and subsequent sale of the company to an international strategic buyer.

Headquartered in Arizona for 30+ years, the company has manufactured and sold antibacterial wipes to major brands nationwide, generating $25mm in annual revenue. After a joint venture partner breached its contract in 2021, our client lost a significant amount of the company’s annual revenue. The company found itself strapped with material equipment and manufacturing facility leases, resulting in severe financial duress.

MCA and management negotiated openly with creditors to keep the company operational and essential supplier materials in stock. MCA sourced and secured DIP financing to provide the cash needed to avoid liquidation. Our team projected and managed cash flow, developed accurate forecasts, and advised on confirming a Ch. 11 plan, including key plan confirmation testimony. MCA’s transparent and reliable communication with the landlord, equipment lessor, and creditors established trust in MCA’s leadership, which was vital to successfully navigating the Chapter 11 process.

MCA vetted and secured a buyer for the operating business, worked closely with management to negotiate the deal and closed a successful sale in December 2022. The sale kept the former owner and CEO/shareholder in a leadership role, satisfied landlord and equipment finance companies, and laid out a path to repay key suppliers and unsecured creditors over time.