This surgical support services company’s 3rd party billing agency failed, causing the bank to call the loans and forcing the company to file Chapter 11.
The bank was about to force a liquidation, believing that the company was not viable as a going concern and expecting a $2 million recovery. Owner/Management desperately wanted to be retained and brought Equity Partners in to forestall the liquidation.
Equity Partners was retained and simultaneously sought joint venture partners or a sale of the business.
Equity Partners secured an LOI for $4 million and conducted an auction, resulting in a $4.6 million contract and lucrative employment contracts for the debtor and management. Nevertheless, the debtor refused to cooperate with the Buyer, torpedoing the deal. Equity Partners brought another Buyer to the table and the debtor refused to cooperate a second time, causing that Buyer to back out. Refusing to give up, Equity Partners recommended dividing the company into three components, sold two and, at Equity Partners’ recommendation, the secured lender collected the accounts receivable. Operations continued uninterrupted and the new company is growing.