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

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