Intelogic Trace

Situation

Intelogic Trace was engaged in providing computer, telecommunications and other electronic equipment installations and support services. In mid-1994, the company found that it was unable to service its indebtedness and effected a restructuring in bankruptcy with its key creditors.

Engagement

Shortly after it emerged from bankruptcy in December 1994, Intelogic Trace engaged Gordian Group to provide advice regarding maximizing shareholder value. Gordian Group promptly discovered that Intelogic Trace had not adequately reorganized and faced an immediate liquidity crisis. A severe liquidity problem would materially and adversely affect the company’s ability to operate, and would result in major losses for all of Intelogic Trace’s constituencies. In order to preserve values for these constituencies, Gordian Group had to move extremely quickly to preserve and maximize the company’s intangible values.By February 1995, Gordian Group negotiated with the Company’s lenders to obtain new capital and certain other concessions. Shortly thereafter, Gordian Group:

• Contacted over 100 potential purchasers
• Obtained a buyer for the Company’s assets prior to filing for protection under Chapter 11 for the second time
• Arranged for the buyer to extend immediate credit, and
• Assisted counsel in orchestrating a second Chapter 11 filing to implement an emergency asset sale

Outcome

By the end of April 1995, Intelogic Trace was sold in a bankruptcy court sale. The proceeds were sufficient to repay the secured creditor in full, and to provide some recovery for unsecured claims. The judge in the case commended Gordian Group for its successful efforts in this very difficult matter.