Example Industry Case Studies
Airline Carriersadmin2020-08-19T15:07:27-04:00
| Client | Situation | Resolution |
|---|---|---|
UAL Corporation (United Airlines) |
Certain of United’s Unions challenged the feasibility of United’s business plan which called for, among other terms, elimination of billions of dollars in certain post-retirement benefits. An ABS professional led a team reviewing this plan on behalf of both the Company and Unions. | A comprehensive review of United’s business plan was undertaken. An opinion with respect to feasibility was reached. As a result of this opinion, the Unions withdrew their objection to United’s plan enabling concessions necessary for United to emerge from bankruptcy. |
Northwest Airlines, Inc. |
Certain Unions holding large claims required a review of Northwest’s reorganization plan to determine whether to support or object to the plan. An ABS professional led a team reviewing this plan. | A detailed review of Northwest’s reorganization plan was undertaken resulting in a recommendation for the Union to support the Company’s plan. |
Flight Options, LLC |
$250 million seller of fractional jet aircraft, and related operational services in the midst of attracting financing from public and private equity markets. Significant financial reporting issues were inhibiting this process. An ABS professional was a member of the implementation team. | The quality and timeliness of financial information was much improved resulting in the production of audited financial statements which enabled the company to attract new investors. Ultimately the Company was acquired by Raytheon’s fractional share group. |
Automotive & Commercial Vehiclesadmin2020-08-19T15:08:48-04:00
| Client | Situation | Resolution |
|---|---|---|
Metaldyne Corporation |
The Company, a global tier-one automotive component supplier, carried substantial debt during a sharp decline in automotive sales. A Special Committee of the Board was formed to evaluate strategic options and engaged an ABS professional as financial advisor. | A sale through bankruptcy was determined to yield the highest return to stakeholders. After an intensive and rapid solicitation and auction process, substantially all assets were sold to certain debt holders (credit bid). |
Tower Automotive, Inc. |
Tower, a global $3.0 billion tier-one automotive supplier, sought relief from non-union retiree benefits (1114 motion). The Non-Union Retiree Committee (the “Committee”) needed a business advisor to challenge Tower’s cause of action. An ABS professional served as business advisor for the Committee. | Tower, a global $3.0 billion tier-one automotive supplier, sought relief from non-union retiree benefits (1114 motion). The Non-Union Retiree Committee (the “Committee”) needed a business advisor to challenge Tower’s cause of action. An ABS professional served as business advisor for the Committee. |
Commercial Vehicle Group, Inc. |
The Company is an approximately $1.0 billion global tier one producer of interior and electrical components for the commercial vehicle industry. An ABS professional served as Chief Strategy and Acquisitions Officer. | The Company’s go-to-market approach was defined, a capital allocation strategy across countries was defined, and over 100 acquisitions across the globe were evaluated. During the course of this assignment two transactions, one domestic and one Indian were closed. |
Collins and Aikman Corporation |
C&A was a multi-billion dollar global tier one automotive supplier which filed for bankruptcy. A solvency analysis of numerous subsidiaries to support avoidance actions was required. This was complicated by substantial intercompany transactions. An ABS professional led the analysis team. | An innovative and fact based analysis was performed which allocated intercompany claims among the various subsidiaries in determining solvency. This matter settled during mediation on very favorable terms for the Estate. |
Delco Remy America, Inc. |
The Company, shortly after its divestiture from General Motors, required significant productivity and cost reductions to improve profitability within its Heavy Duty Starter Motor Group. An ABS professional led a team of Company engineers tasked with improving manufacturing processes. | Developed a process simulation model to enable the redesign and implementation of major manufacturing process. This resulted in cost savings totaling $15.0 million on an annual basis. |
Happich, GmbH |
The Company, an unprofitable German producer of automotive interior systems with $1.0 billion of annual revenue, was the subject of acquisition interest. The buyer required a complete strategic review prior to close. An ABS professional co-led an international team in the evaluation. | Performed a comprehensive strategic assessment outlining a path to profitable growth for the potential buyer. This assessment resulted in a “buy” recommendation accompanied by specific improvement actions post-close. Based on this, the buyer moved forward with the acquisition. |
Confidential |
Two major Tier One suppliers of bearings to the automotive industry were embroiled in a $60 million purchase price dispute related to the divestiture/acquisition of a major division. Disputed claims were centered on the value of accounts receivable and completed inventory. | Performed the analysis of the balance sheet accounts that were in dispute, reviewed documents related to the individual claims and prepared a report of our findings. Provided further assistance to the independent accounting neutral in evaluating each parties claims and determining the appropriate outcome. |
Ford/Visteon |
A Big Three automotive manufacturer and its former captive automotive parts supplier were engaged in a dispute regarding the pricing of parts that were sourced from an independent third party. The captive parts supplier was concerned with the disclosure of competitive information and unwilling to provide documentation to their customer. | Acted as a neutral and reviewed documentation and contracts related to the specific parts in dispute. Investigated bids and documentation supporting the underlying cost assumptions. The work performed allowed the two companies to reach a settlement of their dispute. |
Parts Depot, Inc. |
The Company was a $350 million annual revenue distributor of aftermarket auto parts in the Southeast United States. The Company experienced declining revenue and a substantial debt burden. An ABS professional served as Chief Restructuring Officer. | Completed a location profitability analysis to improve profitability and guided refinancing efforts for $80.0 million of secured debt. This enabled the company to generate liquidity sufficient to support a multi-year operating asset sale which offered the highest return to creditors. |
Consumer Products & Retailadmin2020-08-19T15:13:08-04:00
| Client | Situation | Resolution |
|---|---|---|
Annie’s Homegrown, LLC |
The company, producers of organic foods experienced a surprising large operating loss while liquidity deteriorated to an alarmingly low level one year after purchase by a PE fund. An ABS professional served as interim CFO and COO in response. | Implemented a comprehensive improvement program including cost reduction, working capital improvement and new product growth enabling the acquisition of a similar company. Ultimately, the Company successfully went public. |
Coty US, Inc. |
The Company, is a large perfume and cologne product company selling primarily to “big box” retailers. An ABS professional participated in the implementation of a revised business process to ensure a reimplementation of a failed ERP project was successful. | Performed a compressive process analysis to enable the reimplementation of the system. This analysis consisted of modifications to certain management positions, performance measures and business processes which resulted in a successful reimplementation of the system. |
Freshmark, Inc. |
Regional food processing company with annual revenue of approximately $0.3 billion required a significant improvement in profitability. An ABS professional led a study of the Company’s strategy and operations. | Built an activity based costing model and performed process cost analysis which identified cost reduction and product portfolio optimization opportunities which totaled 2x annual EBITDA. |
Dexter Distributing, LLC |
The Company, a distributor and retailer of exotic products, had 18 retail locations in the Western U.S. An Examiner was appointed by the Court to investigate 12 questions related to the Board of Directors’ fiduciary duties. An ABS professional led a team serving as financial advisor. | Three years of financial information was examined to support the investigation and a report was presented to the Court. The Court had favorable comments with respect to the findings in the report which ultimately led to a settlement among the disputing parties. |
 Private Consumer Products Company |
A consumer products company uncovered significant accounting irregularities. These, in turn, led to large prior period adjustments and credit facility defaults. An ABS professional was engaged to assist the company’s negotiations with creditors. | A strategy was developed allowing the company to maintain profitability and offer a future cash flow stream to creditors, without impairing the secured lender. |
 Private Retail Company |
A growing retail chain needed capital to fund its substantial growth. An ABS professional was retained to source financing. | A strategy was developed to maintain profitability and to demonstrate the strength of the company’s sound strategy. This was the basis for funding from a new syndicated financing group. |
 Private Grocery Chain |
A growing retail chain needed capital to fund its growth. An ABS professional led a team through the assessment of the company’s financial strategy. | An assessment of the company’s assets was performed. The assessment showed that the value of the company was adequate to support the financing needed to fund growth. As a result, the Company was able to obtain growth financing. |
Defense, Electronics & Technologyadmin2020-08-19T15:15:39-04:00
| Client | Situation | Resolution |
|---|---|---|
MagnaChip Semiconductor Company |
The Company, a Korean based Company with annual revenue of approximately $0.8 billion, filed for bankruptcy and submitted a pre-arranged sale and reorganization plan which provided no return to unsecured creditors. An ABS professional acted as financial advisor to the unsecured creditors’ committee (the “Committee”). | The Committee submitted a completed plan which was approved by the court after a dispute with the Company and its secured lender. The plan included a rights offering and reinstatement of existing secured debt (“cram-up”). Two expert reports were prepared: the first advocated a termination of exclusivity and the second supported a reinstatement of the secured debt in support of the Committee’s plan. The Committee’s plan increased creditor returns exponentially as the Company raised substantial capital post confirmation through a high yield debt offering and IPO. |
Three Five Systems, Inc. |
A NYSE listed electronics concern, with substantial holdings in Asia, faced continued operating losses resulting in diminishing liquidity. An ABS professional served as an interim CFO to assist the Board in evaluating strategic options. | A complete strategic plan review was undertaken investigating both revenue enhancement and cost reduction opportunities. This review determined a sale of all assets through bankruptcy would yield the highest value to stakeholders and was the course implemented. |
InaCom, Inc. |
The Estate of the Company (prior to bankruptcy was a $3.0 billion computer distributor and servicer) was pursuing approximately $30 million in preference actions against major corporations including Dell Computer. An ABS professional served as a solvency expert for the Estate. | Testified as an expert witness on solvency and as a result, the matter settled on favorable terms shortly after trial. |
Reltec, Inc. |
This $1.0 billion international manufacturer of telecommunications equipment had obsolete and disparate information systems. An ABS professional assisted the Company in selecting, performing cost benefit analysis, and implementing a new information system. | Substantial cost savings were identified during the course of this analysis and SAP was selected for implementation across all business units. SAP was implemented with minimal business interruption. |
Telxon |
The Plaintiff, a start-up company alleged damages due to an alleged breach of contract against Telxon related to discussions with a potential partner in developing technology to be used in the retail shopping industry. | An ABS professional was part of a team that analyzed the Plaintiff company’s technology and competing technologies, determined the extent of alleged delay damages and prepared a model with cash flow projections to help defend against the Plaintiff’s claims. |
Private Electronic Service Company |
An electronics service company incurred a sudden loss and turned to its lender for turnaround financing. The lender hired an ABS professional to determine the viability of the company. | The viability study showed the company was financially compromised, and unlikely to succeed. As a result, the lender was able to maximize its recovery through an orderly wind-down of the company. |
Private Defense Contractor |
A rapidly growing defense contractor needed project management assistance to oversee large new customer orders, especially in the area of vendor management. An ABS professional was engaged to design a program to monitor vendor requirements and deliveries. | A program was developed to coordinate the many components of the product with the necessary vendor lead times and internal production needs. The company was then able to accomplish very rapid growth by responding to a very short window of opportunity. |
Energy & Utilitiesadmin2020-08-19T15:21:14-04:00
| Client | Situation | Resolution |
|---|---|---|
Citigroup (Enron) Litigation) |
Citigroup, a multi-billion global diversified money center bank, was sued by the Enron Estate which sought recoupment of $250 million for an alleged preferential transfer. An ABS professional wrote an expert report in defense of this action. | The expert report centered on the reasonableness of restructuring actions taken by Enron’s Management in the 90 days prior to Enron’s bankruptcy from the perspective of a restructuring advisor. The matter settled on favorable terms shortly after deposition. |
Calpine Corporation |
Calpine, the second largest domestic electricity generator, faced a $10.0 billion valuation difference between competing constituents. Bankruptcy Judge Lifland needed an expert (Rule 706) to assist in his ruling. An ABS professional led the expert report team for Judge Lifland. | An expert report was written which analyzed the valuation differences between the constituents and recommended an appropriate value for Calpine. After the report was issued, the matter settled at the value concluded in the expert report leading to confirmation of the Company’s plan. |
The James River Coal Company |
The Company is a large coal mining company which was forced to file for bankruptcy court protection. An ABS professional served the Official Committee of Unsecured Creditors (“the Committee”) in determining strategies to maximize their potential return. | Pursued litigation under the Coal Act of 1992. The Trust benefited from work done by its professionals to lobby for passage by the Congress in 2007 of the Coal Act Refund on behalf of James River as a member of The Coal Act Fairness Alliance (“CAFA”). These efforts contributed $14 million. |
Level Propane, Inc. |
The Unsecured Creditors Committee (the “Committee”) for this $80.0 million annual revenue distributor of propane for consumer and commercial use with approximately 60,000 customers, sought expertise to enhance it’s return. An ABS professional served as the Committee’s financial advisor. | Performed a financial investigation of potential causes of action related to former D&O’s and secured lenders. Based on this analysis, the financial facts did not warrant a cause of action. |
Confidential |
Two retail petroleum distribution companies were embroiled in a breach of contract dispute with accusations of unjust enrichment involving a failed joint venture. An ABS professional was retained to act as an independent neutral in an effort to resolve the dispute. | Performed as an independent accounting neutral and reviewed more than 40 claims levied by each of the parties. The engagement involved the analysis of contracts, supporting documentation and industry trends. Prepared a report that calculated amounts due each party that was used in attempt to resolve the dispute. |
Exxon/Mobil |
Plaintiff alleged that Mobil had promised to approve the Plaintiff’s point-of-sale technology for use by Mobil’s branded dealer network. The Plaintiff alleged that due to Mobil’s breach of this agreement and tortious interference that they lost considerable sales resulting in lost profits totaling in the millions. | An ABS professional provided support to a financial expert retained by Mobil to help defend against the Plaintiff’s claims. The ABS professional was responsible for analyzing the damage claims, constructing cash flow models, and helping refute the opposing experts opinions. The case ultimately settled favorable to Mobil. |
Stark County Court of Common Pleas |
Debtor defaulted on a $10 million note secured by 18 retail petroleum properties. Lehman Brothers, the creditor, filed a foreclosure action in the Stark County Court of Common Pleas, requesting the appointment of a receiver and that the properties be liquidated for purposes of satisfying the note. | An ABS professional was appointed Receiver by the Stark County Court of Common Pleas. An ABS professional worked under the direction of the Court to provide operational, financial and investment banking services. This ultimately led to the liquidation of the assets and returning more than 90-cents on the dollar to Lehman, after the payment of administrative fees. |
Financial Servicesadmin2020-08-19T15:24:05-04:00
| Client | Situation | Resolution |
|---|---|---|
Refco, LLC |
Refco was one of the world’s largest futures commission merchant trading companies with over $5.0 billion in assets. The Trustee required assistance in selling a minority position in an options, commodities and futures clearing company. An ABS professional led this effort. | Managed the sale of this minority interest which ultimately sold at a significant premium above net book value through a 363 sale to Morgan Stanley. |
The Financial Guarantee Insurance Company |
The Company, a monoline insurer, faced a TRO filed by a large shareholder in Delaware Chancellery Court who sought to prevent the Company from closing a material transaction. An ABS professional served as an expert valuation witness for the Company. | Submitted and defended an expert report within a two week period. The matter settled on terms favorable to the Company during trial. |
Nexxar, Inc. |
Nexxar was the sixth largest wire transfer company in the world with substantial international holdings. Continuing operating losses and over-expansion led to a liquidity crisis. An ABS professional led a team which assisted senior management in evaluating potential options. | Analyzed strategic options and identifying avenues for interim financing. Ultimately, the plan developed and implemented was a sale of operating assets outside of bankruptcy. |
|
Lehman Brothers |
Lehman Brothers was a Limited Partner and Equity Holder of a REIT that held 68 retail petroleum properties that were pledged as security on a $65 million debt instrument. The General Partner was in default of certain provisions of the financing agreement and the operating agreement. Lehman needed an analysis of the value of the properties to determine whether or not to foreclose on the assets. | An ABS professional led a team of valuation consultants to analyze each of the assets and determine current market value in a rapidly declining market. The ABS professional prepared a report of value for each of the properties and presented the findings to a committee comprised of six senior level Lehman managers. |
 FDIC Regulated Bank |
The financial institution was accused of aiding and abetting a company in the sale/leaseback of emergency medical response units. The financial instruments used in the transaction were made through an investment arm of the bank and transactions flowed through accounts maintained at the bank by the company. | An ABS professional was an instrumental part of a team of forensic accountants that investigated and reconstructed loan transactions entered into by investors who purchased medical response units and leased them back to the company. The professional reviewed transactions made through tax-deferred and after-tax investment accounts. The analysis allowed the financial institution to settle claims made by investors at amounts less than originally claimed. |
Industrial & Medical Productsadmin2020-08-19T15:28:12-04:00
| Client | Situation | Resolution |
|---|---|---|
Steris, Inc. |
Steris was a $90.0 million annual revenue medical device company prior to its acquisition of American Sterilizer, a $0.3 billion annual revenue medical devise company. As part of the acquisition, Steris required a merger integration plan which was developed by an ABS professional. | Developed complete integration and synergy plans enabling the integration of all business process, people and systems. In addition, substantial cost reductions and process improvements were identified. |
Coyne Textile Services, Inc. |
Coyne is the largest domestic privately held laundry company with eleven operating plants and approximately 1,000 employees. The Company had defaulted on it’s secured lending facility and an ABS professional served as Chief Restructuring Officer. | A strategic review to determine improvement opportunities was undertaken which led to large cost reductions and an improved sales strategy. As a result, the lenders were able to forbear over an extended time while the Company paid a substantial amount of debt from operating cash flow. |
International Textile Group, Inc. |
This textile industry roll-up sponsored by W.L. Ross and Company has global reach and diverse textile products. The Board was sued for breach of fiduciary duties by minority shareholders An ABS professional acted as financial advisor supporting council’s case. | A report was prepared supporting a contrarian view, from a financial perspective, to each allegation asserted by the minority shareholders. A detailed response disputing the opposing experts opinion was also prepared. |
 Hamon Corporation |
Hamon, a $0.3 billion U.S. subsidiary of a European public construction company, served the power generation industry. The Company required assistance to stem a liquidity crisis caused by the failure of two large projects. An ABS professional served as financial advisor. | A successful out of court financial restructuring was achieved which included credit commitments of $10.0 million, among other improvements identified during the course of the assignment. |
 Ideal Electric Company |
The Company was a producer of large custom electric generators and motors. The Trustee required a solvency opinion to support an avoidance action and financial analysis to support a debt recharacterization action. An ABS professional served as an expert witness in the matter. | An expert report was submitted and the matter settled during mediation on very favorable terms for the Estate. |
 Private Company |
Engaged by the plaintiff in a breach of contract dispute with its supplier. The plaintiff, a distributor of hydraulic valves to the aeronautical, tire and automotive industries, alleged lost profits due to the defendant refusing to supply valves. | An ABS professional was part of a project team that analyzed the various industries, competing technologies, and economic factors that found the plaintiff had not been damaged due to a change in technology as well as factors attributed to the economic impact resulting from 9/11. |
 Private Construction Company |
A construction supply company found itself in a dispute with its bank as to its viability. An ABS professional was engaged to develop a financial strategy to resolve the dispute. | A financial strategy was developed to clearly establish the entity as viability. This resulted in several offers of favorable new financing. |
 Private Healthcare Products Company |
A large equity fund was seeking funding to start a greenfield health care product company. An ABS professional was engaged to develop a validity study for the new entity. | The validity study assessed the industry, marketing plan, competitive landscape, financial strategy and operating procedures. The study provided the bank support required to fund the venture. |
 Private Injection Molding Company |
A plastic injection molder was in a dispute with its bank over a sizable loss. An ABS professional was engaged to develop financial strategy to ensure financing. | A strategy was developed to ensure the viability of the company. As a result, the bank issued a default waiver ensuring the continued financing of the company. |
Media & Print Servicesadmin2020-08-19T15:41:00-04:00
| Client | Situation | Resolution |
|---|---|---|
C2 Media, LLC |
C2 Media, a $80 million print media concern, filled for bankruptcy because of a failed “roll-up”. The Official Committee of Unsecured Creditors sought assistance to maximize returns. An ABS professional led a team which served as financial advisor. | An expert valuation report was submitted to support a fraudulent transfer claim against the senior secured lenders. The settlement increased the return to unsecured creditors by a large margin. |
Private Printing Company |
A family owned company was experiencing losses. An ABS professional was hired to perform an assessment and develop an improvement plan. | A review of the company’s products, pricing and operations was performed, leading to a strategic plan to reduce substantial down time and reduce the product offering. The company was stabilized, and a growth plan was established to achieve profitability. |
Metals & Chemicalsadmin2020-08-12T10:07:00-04:00
| Client | Situation | Resolution |
|---|---|---|
The United States Steel Corporation |
The Company, one of the worlds largest steel producers, was defending a proceeding commenced by the Attorney General of Canada associated with its acquisition of Stelco, Inc. An ABS professional wrote an expert report in defense of this proceeding. | An expert report was prepared which: (i) determined expected economic and industry conditions at the acquisition date, (ii) opined on actions taken in response to adverse conditions relative to these expectations, and (iii) compared the industries post-acquisition performance to other industry cycles. |
The Worthington Steel Company |
This steel processing company with revenue in excess of $1.0 billion required a better understanding of customer and product profitability as well as the profitability effects of changing volume, price and product mix. An ABS professional led a team tasked with this analysis. | Developed a comprehensive activity based cost model to enable the identification of both cost reduction and optimization of cost, price and volume trade-offs. This analysis led to numerous improvements in profitability. |
The Sapir Organization, LLC |
Sapir, a large private equity fund, required assistance in determining whether to buy and modernize a shuttered integrated steel facility with an estimated capital cost of $0.8 billion. An ABS professional led the feasibility, return and implementation plan analysis. | A feasibility study was performed which included industry research/forecasts, customer surveys, best practice benchmarks, and capital cost estimates leading to an investment recommendation and detailed implementation plans. The 2008 financial crisis terminated the plan. |
 M.A. Hanna Company (acquired by PolyOne) |
This public chemical company experienced an unexpected decline in profit within its color concentrate division. This in turn required a major profit improvement with this division. An ABS professional led a team tasked with analyzing this divisions strategy and operations to improve profitability. | Performed a comprehensive business analysis which included operations simulation, an assessment of processing technology, and review of production planning methods. This analysis led to the identification of major cost reductions including potential facility consolidation. |
 Owens Illinois, Inc. |
Large public glass container manufacturer required an analysis of all financial systems and controls in order to improve the quality and timeliness of financial information. An ABS professional led a team charged with this effort. | Performed a complete financial process analysis enabling a shorter financial closing process at a lower cost. This was achieved primarily through enhancements to existing business systems and changes in certain business practices. |
 Confidential Client |
The Company, a specialty metals processor, was experiencing a decline in profits. Ownership had suspicions of wrong doing by a senior level manager, but could not pinpoint the issue. | An ABS professional led a forensic accounting team in reviewing general ledger transactions and found the CFO of the Company had infiltrated the payroll system and set up fictitious employees and manipulated payroll entries. Additional analysis of other accounts found fraudulent expense reports. The CFO was ultimately convicted of criminal actions against the company. |
 Steel Industry Supplier |
A major supplier to the steel industry suffered a large receivable loss. An ABS professional was engaged to develop a strategy to ensure the company would return to profitability. | A strategy was developed focusing on the negotiation with creditors enabling a return to profitability. The final step of the strategy took the company through a bankruptcy, allowing for a high return to trade creditors through a 363 sale of the company. The sale involved a partnering between the incumbent and new investors. |
Real Estate & Resortsadmin2020-08-19T15:31:41-04:00
| Client | Situation | Resolution |
|---|---|---|
Secured Lender (Large Wall Street Apartment Complex) |
Large apartment complex located in lower Manhattan, experienced numerous and material adverse forecast deviations. Furthermore, certain secured lenders questioned accounting practices. An ABS professional led a team analyzing the situation on behalf of the secured creditors. | A revised forecast based on a market study and other best practices was prepared enabling the secured lenders to better understand their respective position in future negotiations with the borrower. |
Epic Resorts, LLC |
Six resort timeshare company was forced into bankruptcy by certain secured lenders. An ABS professional served as interim Chief Financial Officer | Secured DIP Financing and successfully sold the operating assets through bankruptcy. |
Partial listing of clients served by ABS Professionals:
