Company Overview
The Company was a finance company providing small dollar loans of less than $5,000 to plaintiffs in workmen’s compensation claims.
The loans were non-recourse and were paid only if the cases had a settlement.
Engagement Overview
Senior lending to finance companies quickly decreased prior to the engagement due to industry and economic dynamics.
The Company’s loan portfolio had an average maturity of 2 years.
With no physical collateral to convert to cash, and pressure from the senior lender to reduce lending, the Company merged with its competitor.
The Company suggested that Fort Dearborn be engaged given Fort Dearborn’s industry knowledge from past engagements.
FDP assisted in providing crucial information and due diligence analysis on the loan portfolio for the senior lender and merging competitor.
Results
Fort Dearborn provided due diligence and loan analysis for both the senior lender and the competitor to assist with a friendly merger.
Fort Dearborn’s analysis assisted the senior lender in making the decision to extend the loan until the merger was complete.