CPA, JD, CIRA, CFF, Global Director, Restructuring and Dispute Resolution Practice
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Restructuring and Dispute Resolution case study: Costume company transaction
SITUATION
Representative of unsecured creditors and asset sale
INDUSTRY
Manufacturing – Costume manufacturer and distributor
ENGAGEMENT SCOPE
With margins shrinking and having unsuccessfully refinanced debt with multiple lenders, this leading costume manufacturer and distributor feared that they would have to close their doors forever. The impact of the coronavirus pandemic further complicated their financial position, so they filed for protection under Chapter 11 of the U.S. Bankruptcy Code. CohnReznick was referred to this case by a member of the committee and an attorney representing the unsecured creditors.
WHAT WE DID
CohnReznick and CohnReznick Capital served as the financial advisor and investment banker to the official committee of unsecured creditors in the company’s case. CohnReznick and CRC worked with the debtor’s management team and their financial advisors to assess the viability of the debtor’s businesses as a stand-alone company or through a sale with additional equity infusions.
OUTCOME
Through a successful 363 sale process (named after the Bankruptcy Code section that allows a debtor to sell its assets), the company was sold to a new operator, positioning it to continue for years to come. Had the company been forced to shutter its doors, general unsecured creditors would have received zero recovery. Based upon the successful sale of its assets, general unsecured creditors could receive as much as fifty cents on the dollar.
Kevin Clancy, CPA, JD, CIRA, CFF, Global Director, Restructuring and Dispute Resolution
732.635.3108
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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 members, 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.
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