Pivot Points Newsletter: September 2022

9/20/2022 Updates from CohnReznick's Restructuring and Dispute Resolution team

Receive and explore monthly insights from our Restructuring & Dispute Resolution team

Is non-traditional debt financing right for you?

A stressed or distressed company must maintain the liquidity it needs to continue running the business while positioning itself to satisfy its debts. This is where non-traditional debt financing can be helpful.
However, it’s first important to identify whether non-traditional financing is right for you.
If you’ve determined this type of financing is right for you, then we’ve laid out five steps to take to help you get a loan that best meets your needs.

Q&A: The debt financing market

In this Q&A, Chris Creger, CIRA, Principal, and David Weinstein, Southeast Practice Leader for Debt Advisory, of the Restructuring and Dispute Resolution practice at CohnReznick, talk about trends impacting growth in the debt financing market as well as the benefits and advantages that come with debt financing.

Retail Chain

Background: Specialty retailer and consumer lender needed support related to an acquisition and needed to raise a debt facility to finance the buyout.

Our Role: Lead Acquisition Advisor

Results:

Finalized the structure of the sourced capital and connected the buyer with a provider who funded the capital required to acquire and operate the post-close store
Helped buyer achieve a 30% increase in financial performance through revenue improvements and lean operation initiatives, including beneficial lease modifications

Parts Distributor

Background: An international family-owned business providing aftermarket replacement parts needed to rationalize a current business model for an existing lender and needed to source replacement working capital.

Our Role: Debt Advisor

Results:

Successfully placed a new working capital facility supported by accounts receivable and inventory
Designed a covenant package that allowed the company to meet liquidity and reporting requirements

Dealer, Restoration, and Auctioneer of Antique and Collectible Automobiles

Background: Multi-generational family business – specializing in collecting, dealing, and restoring rare and unique automobiles – undergoing bankruptcy needed a new capital source.

Our Role: Expert Witness and Debt Advisor

Results:

Connected company with a new senior working capital lender
Sourced secondary lender through an inter-creditor agreement to provide an over-advance facility for certain collections

Congratulations to Cynthia Romano who was included in Global M&A Network’s 9th Annual Top 100 Restructuring and Turnaround Professionals list. This is a prestigious award honoring professionals and leaders from the global restructuring, insolvency, and distressed investing communities.

TMA NYC Annual Golf & Tennis Outing (Oct. 11) – Attending

SFNet South Florida Fall Sunset Cruise on the Fort Lauderdale Waterways (Oct. 13) – Attending

ABS East (Oct. 17-19) – Speaking/Attending

IWIRC 29^th Annual Fall Conference (Oct. 18) – Attending

NCBJ 96^th Annual Conference (Oct. 19-22) – Attending

ABI Health Care Program (Oct. 27-28) – Attending

IMN 11^th Annual Bank Special Assets & Credit Officer’s Forum (Midwest) (Oct. 27-28) – Attending

TMA Annual Conference (Nov. 1-4) – Speaking/Attending

GICLI 8^th Annual Meeting (Nov. 7-9) – Speaking/Attending

SFNet 78^th Annual Convention (Nov. 9-11) – Speaking/Attending

AIRA 21^st Annual Advance Restructuring & POR Conference (Nov. 14) – Speaking/Attending

TMA DFW/SFNet Southwest/The Finance Forum Holiday Party & Toy Drive (Nov. 17) – Attending

Annual TMA-SFNet Holiday Extravaganza at Lauderdale Yacht Club (Dec. 1) – Attending

ACG South Florida 8^th Annual Private Equity Wine Tasting & Holiday Party (Dec. 7) – Attending

ABI Annual Winter Leadership Conference (Dec. 8-10) – Attending

Junior Debt Holder

Our role: Improved a junior debt holder’s collateral position in the bankruptcy of an international cosmetics company as well as performed financial and collateral analysis relative to the debt structure and provided expert witness testimony in the court proceeding

Real Estate

Our role: Advised an international private equity firm on the complex restructuring of its Fannie Mae loan secured by the firm’s significant multifamily investment

International Group Purchasing Organization

Our role: Conducted a forensic analysis of volume rebates and other purchase incentives for an international procurement service provider

Litigation Finance

Our role: Performed case file due diligence and analytical procedures regarding the financial condition and reporting capabilities of the funded entity

Best Practices

Our role: Provided an expert report in a private antitrust matter regarding best practices to mitigate anti-competitive activity and barriers to entry

RMBS Litigation

Our role: Provided an expert report regarding industry custom and practice regarding the administration of timely put-back claims.

Global Industrial Equipment Manufacturer

Our role: Built a fully integrated treasury management tool to track and manage cash flow across 150 countries

Bioscience R&D Firm

Our role: Assisted in the development of a five-year forecast and associated DCF valuation with multiple funding structures to enable the client to monetize its product line

Concrete and Aggregate Supplier

Our role: Developed a business assessment model and valuation tool to allow our client to quickly assess and filter potential acquisitions for an aggressive growth strategy

Nursing Home Company

Our role: Advised on restructuring and repositioning of the business; devised an out of court strategy for debt reduction/repayment and implemented day-to-day cash management and vendor strategy

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.}