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Case Study: Capital Equipment Manufacturer

Crisis Management, Wind-down & Liquidation Management, Bankruptcy Consulting

Company: $400 million manufacturer of capital equipment for the beverage bottling industry

Situation/ Tasks Performed: The Company was part of a 1997 leveraged buy-out involving an equity sponsor backed by debt from a group of five banks. The Company used the new funding to invest heavily in its domestic operation and in international operations in Belgium, England, Australia, Germany, Mexico and South America. The Company's revenue grew as planned, but it was never able to become profitable enough to service its high debt load. After an extended period of losses, the Company ran out of cash. TRG was retained to replace the existing consulting group. The CEO and President were relieved of their duties and TRG filled both the CEO and CFO functions with interim managers. TRG ultimately recommended that the Company file for bankruptcy protection. The Company produced expensive capital goods with a very long production cycle. Many of the products they sold cost in excess of a million dollars. Even with assurances from banks, few customers were willing to take a chance on giving large orders to the Company while in bankruptcy. Additionally, the disruption in the business caused by the filing proved to be a considerable distraction. Competitors were able to steal customers as well as engineering and sales talent.

Results: Over time it became clear that the business could not be reorganized. TRG immediately began the process of maximizing value for the bank. All pieces of the business that could be carved out were sold in section 363 sales. The remaining assets were shuttered and auctioned off.

Nature of Assignment:
Primary: Crisis Management
Secondary: Wind-down & Liquidation Management
Tertiary: Bankruptcy Consulting

Industry: Capital Equipment

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