Case Study: Textile Manufacturer
Operational Restructuring
& Implementation, Bankruptcy Consulting, Wind-down & Liquidation
Management
Company: $350 million textile manufacturer.
Situation / Tasks Performed: The U.S. textile market
was experiencing constantly increasing market pressure and declining margins
for a number of years. Succumbing to this pressure, the Company filed
a "prepack" Chapter 11 bankruptcy to restructure its balance
sheet and its operations. However, as revenues declined further, the bank
syndicates' concerns regarding viability escalated. TRG was engaged by
bank syndicate at this point to review the Company's restructuring plan.
TRG concluded that the plan did not take the steps necessary to return
the Company to profitability. Upon its completion of a revised plan, TRG
returned to the Company to perform a subsequent review and concluded that
the business had suffered considerably more market and margin erosion
than originally anticipated. Without significant operational restructuring the Company would not survive.
The Company would need to close more than half of its plants and lay
off a comparable number of employees thereby creating a viable, albeit
significantly smaller, business. New funding was also required and TRG
provided recommendations for resolving this issue.
Results: The bank syndicate informed TRG that the
Company took the initial steps necessary to implement the turnaround plan.
They noticed plant closings and layoffs and informed certain customers
that they would no longer be supplying them. A few months later, however,
the reorganization plan failed due to continued deterioration in the market.
The Company was ultimately forced to wind-down and liquidate.
Nature of Assignment:
Primary: Operational Restructuring
& Implementation
Secondary: Bankruptcy Consulting
Tertiary: Wind-down & Liquidation
Management
Industry: Manufacturing; Textiles
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