Electronic Component Fabrication Company
McShane Group was hired to liquidate an electronic component fabrication company unable to recover from a 75% decline in revenues in an industry facing significant overcapacity in the United States and intense competition from the Far East. The bank wanted immediate shutdown, but was convinced to support the company through a three month shutdown period so proceeds could be maximized. McShane Group developed detailed weekly shutdown budget for the bank indicating it would be no worse off by agreeing to shutdown. McShane Group successfully negotiated a reduction in personal guarantees and negotiated with trade creditors to continue shipping during shutdown period without payment of past due invoices.
- Sold intangible assets (company name, customer list, work-in-process and tooling) to a competitor because of manner in which shutdown was handled with customer base; considered “found” money in this instance.
- Collected 95% of outstanding accounts receivable
- Liquidated equipment through a guaranteed auction
- Bank paid in full
- Significantly greater dividend to unsecured creditors than in a Chapter 7 proceeding
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