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, a 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 served as the financial advisor to the official committee of unsecured creditors in the company’s case. CohnReznick 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.

Following the completion of the sale, CohnReznick is now serving as plan administrator for the company.

Contact

Kevin Clancy, CPA, JD, CIRA, CFF, Global Director, Restructuring and Dispute Resolution

732.635.3108

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