Serving as Interim CEO & CRO and Conducting a Domestic & International §363 Sale
The Situation
A $450M global agricultural feed company headquartered in Ames, Iowa, with hog and feed production operations in 5 US states and across the Peoples Republic of China discovered fraud in its Chinese subsidiaries which led to an SEC investigation, NASDAQ delisting, and an inability to access additional capital. Concurrently, the U.S. subsidiary lost arbitration with its primary customer, resulting in a $9M payment and ensuing credit defaults on it’s $70M senior secured note.
Services
Interim CEO & CRO
§363 Sale / Winddown
The Execution
- Developed a highly creative solution with the goal of resulting in a higher and better bid for the US assets from a consortium of pork producers and incorporating a wind down of nearly half the hog inventory (with a stalking horse bid at just enough to pay secured lenders in full).
- Conducted a successful US sale generated financial and political capital to pay off all secured creditors in full.
- Provided a 100% recovery to unsecured creditors and afford the Debtors time to complete a thorough sale of its Chinese business.
- Maneuvered the political and operational complexities of selling Chinese operations/entities through a US Bankruptcy process.
- Kept the single bidder that emerged committed to the transaction and, despite numerous re-trades and political maneuvering, successfully closed the sale.
The Results
As financial advisors and Interim CEO and CRO, our team led the successful §363 sale of the U.S. business and subsequent sale of the Chinese business. Proceeds generated significant return to equity after payment in full of secured and unsecured creditors. The transaction marked the first ever sale of the Chinese operations of a US Chapter 11 Debtor to a Chinese company. This sale culminated a highly successful and orderly liquidation of all Company assets, resulting in 100% recovery to all secured and unsecured creditors and significant recovery to equity constituencies, in less than one year. The overall result was a robust auction and an increase in the purchase price by $12MM.