Gordian Group advised Colfor and Colmach in connection with their Chapter 11 proceeding, including the successful reorganization of the Companies through a 363 sale process.
Case Study
Colfor Manufacturing / Colmach Manufacturing
CLIENT: Colfor and Colmach
Business Profiles
Situation
Colfor and Colmach, subsidiaries of ABS Industries, were related companies that had combined annual sales of $90 million to the automotive OEM marketplace. Colfor and Colmach were not reorganizable, and had to be sold quickly as a result of an involuntary bankruptcy petition filed against each company.
Engagement
Gordian Group was retained shortly after the Company entered bankruptcy to run the sale process. All buyers were aware of the Debtors’ vulnerability, and many were prepared to sit back to see whether there would be a liquidation at bargain prices. Due to such buyer "fence sitting", Colfor and Colmach faced the unpleasant prospect of: (i) having lender and customer support withdrawn, (ii) facing near-term deadlines with the Bankruptcy Court and, (iii) not having a lead bidder in hand with which to file a sale motion.
Outcome
Gordian Group was successful in creating an auction sale environment that drew seven bidders from the sidelines. Moreover, Gordian Group orchestrated a process that forced buyers to submit "highest and best" offers and that resulted in a significant increase in consideration from the opening bid. The companies signed a contract with the highest bidder, which was presented to, and approved by, the court.