Company Overview
The Company operates two state-of-the-art lumber mills in Wisconsin used to manufacture wood flooring for distribution through the World.
Engagement Overview
Due to a combination of oversupply and a lack of demand, the Company’s two mills were operating at a fraction of normal capacity. In additional, due to a lack of demand, wood flooring inventories increased significantly as wood prices fell.
Due to an abundance of concern, the Company’s senior lender engaged FDP directly to review operations, examine the borrowing base collateral and assist with an exit from this troubled credit.
FDP performed a detailed review of working capital identifying significant issues with receivables and inventory. Additionally, FDP identified significant issues with unsecured venders.
FDP advised the senior lender with regards to timing of borrowing base calculations from the Companies and advised to certain reserves as a result of our review.
FDP prepared a liquidation analysis and developed an exit plan for the senior lender.
Results
FDP’s examination of the collateral and understanding of the operations of the Companies provided the senior lender with valuable guidance in managing the credit relationship.
Senior lender, through FDP’s efforts, successfully exited its lending relationship with no loan loss.