MCA Financial Group was engaged as Chief Restructuring Officer by a national manufacturer of printer toner cartridges serving customers across the U.S. and Canada. The engagement was initiated at the request of the secured lender, which sought independent oversight of operations, liquidity, and the transition of the business to a new ownership group.
Situation
The company encountered significant disruption when COVID-era supply chain constraints limited its ability to source inventory. Sales declined, liquidity tightened, and working capital needs quickly outpaced availability. A highly leveraged capital structure further restricted refinancing options, while divergent priorities between the senior secured creditor and subordinated private equity firm complicated efforts to stabilize the business.
Our Role
In its CRO capacity, MCA assumed responsibility for operational and financial management while working closely with the majority shareholder and his leadership team, focusing on stabilizing cash flow and preparing the company for a sale.
Among the steps taken were:
- Aligning staffing and payroll with reduced operating volumes.
- Narrowing the product line to emphasize higher-turning, higher-margin SKUs while liquidating slower-moving items.
- Relocating operations from California to Arizona to reduce fixed costs and improve the cost structure
- Coordination of an Article 9 sale process to effectuate a sale of the lenders’ collateral.
Challenges & Execution
Liquidity constraints were particularly acute, limiting the company’s ability to maintain adequate inventory levels. These challenges were compounded by competing lender objectives. Through direct negotiations and structured communication, MCA facilitated an agreement among stakeholders, enabling operations to continue through the completion of the Article 9 transaction.
Outcome
The senior secured lender recovered on its debt, subordinated creditors retained an interest in the post-sale business, and the owner resolved obligations related to personal guarantees. Employees transitioned to a more sustainable platform, while stakeholders recognized MCA’s role in guiding the company through a complex restructuring and sale process.
This engagement underscores MCA Financial Group’s ability to provide steady leadership in times of disruption. By balancing the interests of secured and subordinated lenders, guiding management through operational changes, and executing a structured sale process, MCA preserved value for stakeholders while creating a more sustainable platform for the future. The outcome reflects MCA’s commitment to delivering clarity, stability, and practical solutions in complex restructuring environments.
Contact us today to learn how MCA can support your next critical transition.