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Case Background
Minneapolis-based Tiger Oak Media Inc. was a print publishing company with four business groups and operations in several states. The parent company provided shared services to all four and extracted a large sum of money for doing so. In 2018, it had $14.2 million in revenue, a net ordinary loss of 972,150 and a net loss of $935,575. Its financial situation was worsening by the day because it lacked adequate accounting and leadership, and had overspent in recent years. The company filed for Chapter 11 in Oct. 2019 noting assets valued at less than $50,000 and debt of at least $3 million. Making matters worse, when COVID-19 hit the U.S. economy in spring of 2020, it had a profound negative impact on the print publishing industry. By the end of 2020, Tiger Oak’s annual revenues were $6.2 million, net operating income was $268,391 and net income was $20,286.
Edwin H. Caldie of Stinson LLP was appointed to serve as Chapter 11 Trustee of the Tiger Oak bankruptcy estate in January 2021. The operating trustee and his team quickly developed a plan to secure the strongest possible return for creditors in the case. That plan involved reconciling and reconstituting the company's financials, securing key employees, resolving complex issues relating to the payment of the company's secured debt, moving the company's operations to a far less expensive facility, litigating and liquidating multiple estate claims against third parties, including several against the company's former CEO, working with the unsecured creditors' committee, and marketing the company's assets for sale.
Platinum Group was retained in late the spring of 2021 by Edwin H. Caldie, the trustee, to market and sell the assets. Platinum Group quickly determined the best way to receive the most for these assets was by selling the individual publishing units. However, Tiger Oak had no accounting set up for each and instead comingled revenues, expenses, and cash flows. Platinum Group began this project by first analyzing available financials and worked with a trustee-appointed accountant to develop reliable information before placing more than 250 records into a private, electronic data room Platinum Group set up for interested parties to review after signing an NDA. From there, Platinum Group developed a dual-track valuation process for negotiation purposes. It then reached out to 38 potential acquirers nationwide. Six interested parties came forward and four offers moved forward.
The sale of these four business units fetched $2.4 million. Each was acquired by an entity that planned to invest in them and retain the employees who came with the assets. Meanwhile, Stinson’s Caldie and associate Andrew Glasnovich were able to operate the company at a breakeven or a slim profit for much of the period of his appointment (with the help of a dedicated group of employees still working at Tiger Oak) while succeeding in the prosecution and settlement of a wide array of affirmative claims of the estate against multiple parties, recovering a sizable tax rebate and resolving nearly all secured debt. As a result, unsecured creditors were expected to receive 92 to 96 cents on the dollar.
Key Players in this award-winning Turnaround case:
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