Gourmet Express, LLC
A frozen skillet meal manufacturer with production in Gridley, IL, sales offices in San Antonio, TX, and was undergoing a major refurbishing of a facility in Greenville, KY in to which they intended to consolidate operations.
Shareholders were embroiled in state court litigation with each other and their bank note was coming due. No one shareholder wanted to enter personal guarantees to extend the financing without resolution, and the otherwise healthy business was beginning to be paralyzed by the litigation and related rumor mill. The company ultimately filed Chapter 11.
Equity Partners was retained and immediately worked out a mutually agreeable buy-sell between the partners that would end the litigation, while, at the same time, sought outside buyers and investors.
Through a competitive process and negotiations with numerous private equity groups, a deal was selected that paid all creditors 100%, while generating $18 million for the shareholders. That deal then continued to improve, eventually leaving two of three shareholders with substantial equity and some cash, and employment contracts to continue running the business. The third shareholder took $9 million in cash, a short term consulting contract, and a significant non-compete package. The business continued to operate, freed from litigation and properly capitalized.