The Company is a leading independent manufacturer of components and assemblies to the global aerospace industry. At the time of our engagement, the Company was publicly traded with manufacturing locations in the US and Canada.

Principal products include gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts for helicopters and fixed wing aircraft. In addition, the Company provides maintenance and repair and overhaul (MRO) on these same platforms. 

Delays in orders from its largest customer (a global aerospace company), and continuing losses from operations, forced the Company to consider its strategic alternatives, ultimately leading to the sale of the Company.   Cross-border issues, the strained relationship with Boeing, and approval by the Department of Defense increased the complexity of proposed transactions.  

Fort Dearborn was engaged by the Company’s Bank Group, comprised of three lenders with over $60 million in senior debt, to provide oversight of the strategy, analysis, and actions of the Company’s Investment Banker (“IB”) and financial consultant/Chief Restructuring Officer (“CRO”). 

Fort Dearborn was actively involved in:

Initial review of cash forecasts and capital needs requested by the Company and its advisor, and working to improve reporting of weekly cash flows and collateral;

Reviewing the process for sale of the Company being conducted by the IB, including potential buyers contacted, status of “indications of interest,” strategy with most likely buyers and potential issues getting to a closing;

Negotiating terms of various forbearance agreements between the Bank Group and the Company and its advisors, including weekly budgets and collateral monitoring;

Focusing the IB and the CRO on conducting an “auction” for the stalking horse role and the potential closing issues that would result from the Bank’s growing senior debt hurdle;

Reviewing/commenting on purchase documents, the related deal structure and reserves;

Negotiating DIP loans, financing documents and related reserves for both the U.S. and Canadian entities; and

Working closely with the Canadian Monitor and the U.S. Wind-down Officer during the post-closing period on issues involving retained asset monetization, reserve payouts and working capital disputes.

Worked with the US Wind-down Officer and Canadian Monitor in negotiations with the Purchaser post-closing regarding working capital disputes; assisted estates in analyzing and compiling information that was ultimately used to object to the Purchaser’s claims and drafted the rebuttal report for the arbitrator.

Worked with the wind-down officer and Canadian Monitor to oversee liquidation and monetization of approximately $15 million in reserves and escrows, and over $5 million in retained assets on behalf of the Estates and Bank Group.

Input into the transaction led to a greater amount of retained assets for the remaining estates.

Negotiations with the Company’s largest customer led to raising $6.1 million of junior subordinated debt participation in the DIP loan.

Developed strategies to defend aggressive Purchaser working capital adjustments.