The Company is a multiplant manufacturer of disk-drive components, molded plastics and specialty motors.

Manufacturing capabilities included CNC machining, plastic molding, assembly, level 4 clean room assembly, with major disk-drive component manufacturing & assembly facilities in US & Malaysia.

Over-investment in manufacturing assets related to the disk-drive business resulted in a severe liquidity crisis when the market “crashed.”  The Company was on a COD basis with critical vendors, had defaulted on its debt payments, and customers were becoming concerned.

This engagement was a late-stage turnaround that evolved into a liquidation. FDP was initially hired to evaluate the Company’s ability to return to its previous levels of revenue and profitability, however, it quickly became obvious that cash flow could not improve fast enough to support the high level of debt.  FDPs scope of work was broadened to include evaluation of various liquidation alternatives.

FDP quickly determined that maximum value would be realized by selling the diverse lines of business as going concerns, including the Malaysian operation, auctioning excess assets (tool room, etc.), converting customer-specific inventory to finished goods and collecting the related receivables.  The stakeholders approved our plan and retained FDP to lead its implementation.

Overall recovery was far greater than originally anticipated by the secured lender.

Over the course of 4 months, FDP arranged and negotiated the sale of the primary lines of business in 6 separate transactions – including the overseas sale of the Malaysian operation, negotiating an agreement for the auction of excess equipment with a guaranteed floor price, converted the majority of inventory and collected the receivables, and successfully monitored the wind-down of the business – all while keeping vendors at bay, retaining the necessary work force to maintain operations, and accomplished the wind-down outside of any court supervised process.