Exit Advisory/Asset Disposition Case Study

Error message

Notice: Undefined index: smart_paging_title_display_suffix in smart_paging_field_attach_view_alter() (line 604 of /imedia/users/PCSLLC/htdocs/sites/all/modules/smart_paging/smart_paging.module).

An aerospace parts manufacturer, sole source supplier for many large aircraft builders, ran out of cash due to overly optimistic expansion followed by declining revenues. They had no cash to operate but a simple liquidation was not feasible: rigorous handling standards meant raw material and WIP could not be sold or transferred to another supplier and manufacturers needed at least two months to qualify a new supplier.

A hybrid plan was crafted to generate fast cash from a sale of non-inventory assets while operating with a very limited staff to complete the remaining material in the factory (additional financing provided by a DIP lender and accelerated customer payments). The crafting and implementation of this strategy resulted in the following benefits for creditors:

  • The value of the assets were maximized via sale of finished goods sold at retail prices.
  • The cost of cleanup was greatly reduced by not having to remove raw material and WIP.
  • Claims from the aircraft builders were minimized because they received product.