BCA immediately developed and implemented a detailed crisis business plan that prevented the company from running out of cash and also averted conversion to a Chapter 7 liquidation.

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Hospitality Industry Equipment Leasing Entity
Zug, Switzerland

Overview

A major privately-owned in-room equipment leasing company, along with its sister company, was the worldwide leading provider of in-room refreshment centers, with in-room bars and safes in more than 375,000 hotel rooms and cruise ships in 20 countries.  The company generated its revenue from the leasing of the in-room drink and snack bars, as well as service and training contracts with hotels worldwide.  The group of companies was  in a crisis situation with its major US. company having filed for Chapter 11 protection. Both companies were virtually out of cash and in dire need of cost controls and management structure.

The enterprise had filed for Chapter 11 bankruptcy in the United States, and was in various degrees of financial crisis in several other countries, including France and Spain.  The company‘s total debt exceeded $100 million, which was owed to several banking institutions in several countries.  There also were internal management and operation issues within the U.S. subsidiaries 

Project Scope

Phase One

With the approval of the U. S. Bankruptcy Court, Benjamin Capital Advisors was retained to rapidly analyze the crisis and recommend a turnaround business strategy that would maximize a return to creditors and avoid liquidation of the company.

Charles D. Benjamin was appointed to the position of Chief Restructuring Officer and also to acting CEO.  At the start of the engagement, the U.S. company was within two weeks of running out of cash.

Phase Two

BCA immediately dismissed the existing CEO and eliminated more than 65% of redundant or unnecessary personnel, as well as cutting other costs. BCA reestablished communications with an extremely hostile creditor group.

BCA immediately developed and implemented a detailed crisis business plan that prevented the company from running out of cash and also averted conversion to a Chapter 7 liquidation.

Phase Three

Over a period spanning nearly one year, BCA returned the company to profitability after seven consecutive years of losses.  Equitable negotiated settlements were achieved with all creditors.  BCA also participated in exploring a sale of the company involving many potential acquirers from Germany. Switzerland and the United States.

Phase Four

Once an appropriate corporate acquirer was identified and a purchase agreement executed, BCA assisted in the preparation of a reorganization plan acceptable to the creditors and the U.S Bankruptcy Court.  The U.S. entity then emerged from Chapter 11 under new ownership.

Phase Five

After exiting from Chapter 11, following the recommendation of BCA, the new ownership elected the company’s former CFO to the CEO position. Charles D. Benjamin remained as an advisor to the board of directors of the “new” company for one year, and the company regained its industry leadership position during this period.  Sales and profitability followed suit.

Conclusion

Creditors received an unexpected and substantial Chapter 11 dividend.  Stockholders sold their interest in the company successfully and profitably. The worldwide company remains today one of the leading companies in its industry.