MCA Financial Group was retained by the senior secured lender as a financial advisor and restructuring advisor for the Chapter 11 bankruptcy of an international mid-market aerospace and defense technology manufacturer. The lender had provided secured financing in early 2023, with the loans later exchanged and extended before ultimately defaulting the following year, followed by the termination of a proposed merger when the company filed for Chapter 11 bankruptcy protection in the summer of 2024.
MCA was engaged to assist the lender throughout the restructuring process. MCA’s role included reviewing bankruptcy pleadings, historical and projected financial information, and subsidiary-level operating performance. MCA was tasked with developing expert financial analyses and opinions as needed, including assessments of collateral value, liquidation analysis, plan feasibility, and recovery scenarios to support the lender’s evaluation of its secured position and strategy in the case.
Several factors had led to the manufacturer’s deteriorating financial condition, including operational inefficiencies, underperforming subsidiaries, liquidity constraints, and execution challenges across a complex, multi-jurisdictional corporate structure. A declining backlog, a limited forward-order pipeline, and rising operating costs further strained margins and cash flow.
The engagement involved several notable challenges, including the quality and consistency of information; frequently revised forecasts and assumptions; differing assessments of the performance and go-forward viability of individual subsidiaries; and the shutdown and liquidation of a subsidiary during the bankruptcy process.
MCA worked directly with the lender, legal counsel, the debtor’s management team, and the financial advisor retained by the debtor. Despite an inherently adversarial dynamic, interactions were professional and focused on obtaining financial information, understanding subsidiary-level operations, and evaluating plan assumptions. MCA maintained independence and objectivity while navigating this dynamic to obtain timely access to data and clarity around evolving projections.
Ultimately, MCA facilitated a consensual settlement that resulted in the lender’s investors being paid in full under a confirmed Chapter 11 plan. This outcome exceeded the client’s initial recovery expectations and reflected the value of MCA’s advisory role in effectively assessing risk, evaluating recovery scenarios, and navigating the restructuring with confidence.
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