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Untitled Document

Manufacturing -- Envelopes

Analysis and Quick Liquidation

We were engaged by an asset based lender to provide them with a quick analysis of a manufacturer of envelopes. The analysis provided valuable insights to the lender of the value of the collateral which consisted of receivables, inventory and equipment. It also indicated that the business could not generate sufficient cash flow going forward to enable it to survive.

The results of the analysis were reviewed with both the lender and the management/owner of the borrower and it was determined that the business should be liquidated. The owner agreed to grant peaceful possession of the assets to the lender and to provide assistance to the professionals in the collection of accounts receivable and sale of inventory. An auctioneer was engaged to sell the equipment and the remaining inventory at auction.

At the conclusion of the case, the lender recovered nearly 100% of its loan including the costs associated with the liquidation process. The lender did not proceed against the principal on his personal guarantee because of the high degree of cooperation that he provided. This case from start to finish took approximately three months.