Company Overview
The Company was a paper merchant and converter that operated out of four locations in Chicago, Philadelphia, Dallas and Nashville.
Engagement Overview
The Company’s profitability began to suffer as a result of its overhead structure, as well as pressure on paper pricing and margins. In addition, the cost of moving one operation and starting up another operation were funded through their line of credit. These expansion costs strained working capital and vendors began shutting off the flow of inventory.
Fort Dearborn Partners became involved with the Company and quickly determined that without a significant cash infusion, the Company would not have the time to return to profitability.
With the Company’s bank already over-advanced, and no other sources of capital available, FDP led the Company through a self-liquidation of its assets while it tried to find a buyer for its plants.
Costs were cut, a plan to convert inventory into standard sizes was initiated, sales efforts were focused on current inventory and receivable collection efforts were increased.
Results
The Company filed for Chapter 11; FDP continued to advise the Company in bankruptcy with respect to the liquidation of its assets and the wind-down of the estate.
FDP struck agreements with buyers for two of the Company’s plants and negotiated with a third for the Company’s remaining assets.