One of our clients, a money center bank, was the primary lender to a rapidly growing business in an economically-cyclical industry. When the borrower's sales and EBITDA fell by 55% and 86% respectively, it filed Chapter 11 and pursued a reorganization that would have resulted in a significant write-down of the lender's debt. Rather than take what they could at the time, our client opposed the plan in pursuit of an operational and financial turnaround. Some of the company's other lenders either took back their collateral or sold their debt at a severe discount.
We worked closely with the company's management and board of directors, our client, and our client's legal counsel to identify and analyze the potential risks and benefits of various alternatives. The team's diligent approach resulted in improved performance and a clean balance sheet for the company.
Less than five years after the company filed for bankruptcy protection, our client received full payment of all outstanding amounts as well as payment on warrants awarded in the company's plan of reorganization. That's a good ROI.