A lower-middle-market company in the e-commerce and print-on-demand fulfillment industry was under an LOI to be acquired by a third party. When the buyer backed out, the company was left with minimal liquidity, putting the senior secured creditor and the company itself at risk.
MCA was retained by the CEO to serve as the Chief Restructuring Officer (CRO) of the company, reporting to the board of directors and supervising and directing all operations and cash activities. The CEO and board, however, immediately resigned after the engagement was finalized—leaving MCA to build trust with the remaining senior leadership.
In cooperation with the president of operations and the CFO, MCA commenced work to stabilize operations and cash flow. Discussions with the senior lender focused on cash management and cash forecasting to ensure there was sufficient liquidity to continue operations and preserve enterprise value. Tight liquidity forced MCA to be very specific about its requested expenditures, requiring weekly cash collateral use only after bank approval.
Shortly thereafter, MCA and the company launched a targeted sale process. Conversations with buyers focused on the preferred transaction structure, namely, reducing any third-party buyer’s exposure to certain of the company’s historical liabilities. Although negotiating delays during the sale process added to the liquidity crunch, the sale was ultimately consummated.
The failure of the original deal left the company and its secured lender with significant uncertainty and a lack of strategic focus on resolving a dire financial crisis. By maintaining operations and bringing once-unviable offers back to the table, MCA enabled the company’s assets to be sold to a third-party buyer. The engagement highlighted MCA’s capabilities in restructuring, cash management, and thoughtful evaluation of transaction structuring alternatives in distressed situations.
Contact us to learn how MCA can help you navigate complex transitions with confidence.