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Case Study: Private Label Underwear ManufacturerLiquidation Consulting & Wind-down Management, Management of Debtholder/Investor Relations, Bankruptcy ConsultingCompany: A $200 million manufacturer of private label briefs, panties and t-shirts for major retailersSituation/ Tasks Performed: The Company had been experiencing declining sales and profits for several years due to offshore competition. In spite of the relocation of all sewing operations offshore, the Company was unable to meet the cost structure of its competitors. As the Company's projections indicated continued losses and a near-term out-of-trust situation with its borrowing base, the Company was encouraged by its lenders to hire a consultant to develop a plan of action. While the Company had been pursuing possible merger partners to increase volume in its facilities, the consulting firm recommended the liquidation of the Company. Due to disagreements between the Company and its consulting firm, as well as between the Company and its lenders, the Company engaged TRG to assist in the liquidation process. TRG helped develop a wind-down budget, obtain approval for DIP funding from the Company's lenders and establish a liquidation plan. TRG became the Liquidation Agent for the Company in a liquidating Chapter 11 case filed in the state of Delaware. Results: TRG was able to facilitate communication and cooperation between the Company and the lending group. With this cooperation, the orderly wind-down and liquidation of the Company was made possible. Although initial projections indicated a shortfall for the senior lenders, success in moving inventory to existing customers led to the payment in full of the senior debt and a substantial recovery for the subordinate lender. Nature of Assignment: Primary: Liquidation Consulting & Wind-down Management Secondary: Management of Debtholder/Investor Relations Tertiary: Bankruptcy Consulting Industry: Apparel |
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© Copyright 2007 The Recovery Group, Inc. All rights reserved |
