Weiser LLP Consulting; New York
Weiser LLP Consulting; New York
There are thousands of Chrysler and GM automobile dealerships around the country that are currently in the process of restructuring or winding down their businesses. Additionally, we have been involved in and noticed a significant number of other foreign manufacturer automobile dealer restructurings.
Restructuring or wind-down strategies for dealerships may differ based on the strength of their domestic or foreign manufacturer and dealer-specific financial and operational conditions. But there are common threads in these processes. The floor-plan financing used by the dealerships to purchase vehicle inventory from the manufacturer is usually supported by a personal guaranty from the owner of the dealership. Owners have significant personal incentive on maximizing the proceeds from sale or wind-down of their dealerships.
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Focus Management Group; Philadelphia
Focus Management Group; Tampa, Fla.
Professionals recognize that receiverships can provide a cost-effective and efficient way to liquidate failed businesses, and that receiverships can provide some bankruptcy benefits without the high cost or lengthy proceedings associated with bankruptcy cases. Receivership professional fees tend to be less than those incurred in a restructuring or liquidation under the Bankruptcy Code. Accordingly, and particularly since BAPCPA’s enactment, the number of receiverships has significantly increased.
The “perfect storm” that recently hit the U.S. economy has made 363 sales under the Code far more difficult to close due to lower business valuations, a lack of debtor-in-possession/acquisition financing and equity sponsors' illiquidity. As a result, there has been a spike in the number of businesses that have been liquidated by their senior creditors. In turn, receiverships are often indicated to better control the wind-down and liquidation of a business and to maximize asset-recovery levels. The increase in receivership activity has been noteworthy in two industry sectors—real estate and auto dealerships.
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ABI's 21st Annual Winter Leadership Conference will take place Dec. 3-5 at the gorgeous La Quinta Resort & Club in La Quinta, Calif. This year's conference will offer insights from some of the top insolvency and restructuring experts on issues confronting the profession in 2010.
The Financial Advisors Committee will partner with the Technology and Telecommunications Committee to present a session entitled "News at 11? Valuing and Restructuring Media Companies" on Saturday, Dec. 5 at 9:30 a.m. Gerald A. Shapiro of CRG Partners Group LLC in Wilton, Conn. will moderate. Panelists will include Steven Cramer of Imperial Capital, LLC in Los Angeles, Charles R. Goldstein of Protiviti Inc. in Baltimore, Paul V. Possinger of Proskauer Rose LLP in Chicago and Bennett Ross of Wiley Rein LLP in Washington, D.C. Register today!
