Morrison Knudsen

Situation

MK was a large engineering, construction and mining management services company. At the time of its financial distress, MK was desirous of exiting its money-losing transit business. MK, facing insolvency, struck a complex deal with its banks and with its surety companies that had provided performance and completion bonds to the Company. In 1995, after an unsuccessful sale process, MK transferred certain assets and contracts relating to the manufacture of mass transit vehicles for various municipalities into a newly formed limited liability company established for the benefit of the sureties. In turn, MK received cash and was released from certain financial obligations in this “spin-off” transaction that had an aggregate deal value of over $200 million.

Engagement

Gordian Group was retained to render an opinion that the transaction was fair to certain creditors of MK. We were selected because of our significant capital markets and opinion experience, and our ability to perform a massive amount of due diligence, valuation, solvency and other work in a very short period of time. Gordian Group’s work involved examining the transaction (and the alternatives thereto), the implications of a bankruptcy on the claims (secured and otherwise) of various creditors, together with the valuations and financial obligations of the other MK entities.

Outcome

As a result of Gordian Group’s work, MK was able to close the transaction on the eve of bankruptcy, thereby removing the MK transit business from the bankrupt estate.