CIRA, Principal, Restructuring and Dispute Resolution Practice
View full biography
Restructuring and Dispute Resolution case study: Financial institution and retail business transaction
Out-of-court restructuring and secured debt sale
Consumer – Financial institution and retail business
This business was declared in default on a senior secured revolving credit loan, and the bank demanded immediate payment. In the best interest of all stakeholders and the senior secured lender, it was agreed to appoint Chris Creger of CohnReznick as Chief Restructuring Officer (CRO).
As CRO, we worked with management to gain an understanding of the day-to-day operations and financial position of the company, including preparing integrated financial statements, a 13-week cash flow, and subsequently a five-year financial projection. This allowed the company to enhance our short-term and long-term outlook to facilitate a potential refinancing or sale of the business. With this information in hand, our team identified and implemented opportunities for developing restructuring initiatives and a comprehensive turnaround plan that included store closures, inventory destocking, staffing optimization, and managing operating spend. These initiatives were successful in eliminating overhead, reducing expenses, generating cash flow, and adhering to a formal forbearance agreement with the senior secured lender.
Our team identified more than 100 potential capital providers. The existing debt was sold to a new lender that offered more favorable terms and a longer repayment runway. Our client avoided a forced liquidation by the former senior secured lender and prevented personal financial harm to the stakeholders.
Chris Creger, Principal, Restructuring and Dispute Resolution
347.266.4008
Related Services
This has been prepared for information purposes and general guidance only and does not constitute legal or professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its partners, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
Year In Review: Transactions & Turnaround Practice
Learn more
Related Insights
-
InsightPivot Points Newsletter: June 2023In this edition of CohnReznick's Restructuring and Dispute Resolution team's Pivot Points newsletter, the team discusses topics such as navigating distress in commercial and multifamily real estate. Learn more.
-
InsightReviving distressed healthcare organizations: Strategies for operational improvement and sustainabilityImplementing strategies such as telehealth, remote patient monitoring, operational efficiency, revenue cycle management, and alliances has helped some healthcare organizations improve their operations and financial position.
-
InsightWhat IIJA, IRA funding can do for renewable energy investmentsChristopher LivingstoneWhile it’s possible to maximize IIJA and IRA incentives with renewable energy investments, it can be a challenge to navigate. Learn more.