Gordian was instrumental in implementing a solution that solved the Company’s liquidity crisis and provided the Company with much-needed runway to ultimately maximize value for all stakeholders.
With the sale process in free fall, the Sponsor was faced with the possibility of having to fulfill its guaranty on a portion of the Company’s debt, which was comprised of the Company’s roughly $60 million of senior debt (the “Bank Debt”) and ~$40 million dollars of subordinated debt (the “Sub Debt”, owed to the “Sub Lender”).
Gordian was engaged and broadly charged with managing the situation to the best achievable outcome. Gordian quickly engaged with the remaining buyers to understand exactly where the process stood in light of the latest operating results. The focus of the engagement shifted to securing (i) sufficient liquidity for the business to right its operations, and (ii) a forbearance from the Banks of a sufficient duration to deliver improved results and begin anew a sales process based thereon.
After the Banks indicated an unwillingness to consider a forbearance, Gordian pivoted and solicited and negotiated a proposal from the Sub Lenders. This yielded a proposal in which the Sub Lender and the Sponsor cooperated to provide the Company with fresh capital.
By galvanizing enough constituent support around a solution and identifying and using what leverage was available to the Company, Gordian was effective in solving Company’s liquidity crisis and provided the Company with the runway to maximize value for all stakeholders – including the Sponsor, whose Guaranty was not only not called, but reduced.