Case Study 2

Financially restructure and sell parts of Dealer Group

Challenge

Family-owned dealership with 10+ stores faces leadership challenge and significant organizational hurdles
  • Posts $10M+ loss after consistently delivering $20+ million annual profit
  • Owners contest differences in court
  • Brands include: Chevrolet, Hyundai, KIA, Nissan / Infiniti, Mercedes-Benz, Maserati

Focus

Implement action plan to transition the Group from near bankruptcy to either a recapitalization or sale
  • Refocus key stakeholders on the Group’s value – particularly high-performing flagship stores
  • Align owner interests to create pause in litigation until plan is implemented

Approach

Execute restructuring strategy in parallel with sale of assets. Implement set of immediate tactics to create positive cash flow over 12-month period
  • Negotiate forbearance agreements with Group’s major lenders
  • Renegotiate key vendor terms
  • Hire legal representation to resolve outstanding tax issues – negotiate deferment of payments due
  • Maintain and improve dealership operations while identifying qualified buyers/investors for a sale

Results

Successfully completed $225M transaction for the sale of seven of the Group’s dealerships
  • Delivered functioning, profitable operation to the new owners
  • Retain 90%+ of dealership employees
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