Situation
Lynx Chemical, a specialty chemical manufacturer, had one plant devoted to the carpeting industry and another to small batch specialty manufacturing for an assortment of other chemical companies. As the result of selling a separate plant at a loss, coupled with changing economic conditions, the company feel into conflict with its lender and became considerably out of covenant on its ABI.
Action
In this case, GGG acted as both Director of Reorganization and Interim CFO. However, due to mounting losses and a defaulted bank loan with a lender fatigued bank, Lynx filed for Chapter 11 under the U.S. Bankruptcy Code. With GGG intervention, the lender and court approved a cash collateral order, allowing GGG to stabilize cash flow, sell Lynx subsidiaries, and wind down business operations.
Results
The lender was paid in full from the sale of assets and operating businesses. Thankfully, the majority of employees retained their jobs.