New Growth Advisors was appointed receiver over the going operation of Amco Products. Amco Products was a multi-generation family owned and operated business struggling as many of its customers shifted supply from domestic manufacturers to lower-cost foreign manufacturing. This type of off-shoring had practically killed Amco Product’s business. The company’s 8 year old, 60,0000 square feet of offices and manufacturing space had been built to facilitate the company’s growth, but was actually weighing down the company’s profitability as revenue declined.
Amco Products, especially in receivership, could easily have been liquidated. It was expected a total liquidation would result in proceeds of an equipment auction being realized by the receivership and paid out primarily to the secured creditor. However, the big concern was that the real estate, a real gem of a building that was significantly oversized for the operation it contained, would languish on the market for many months if not years. New Growth Advisors believed a going-concern sale of the operating business along with the real estate would result in the maximum achievable net recovery. NGA emphasized net recovery, as the success of any receivership is measured, by the recovery to creditors after all costs, those of the receivership itself, but also carrying costs of assets, such as foregone interest expense on the non-performing loan and accruing property taxes that must be paid prior to the real estate being transferred free and clear of liens and encumbrances. Accrued property taxes must be paid at closing on the sale and transfer of real estate.
With a goal of maximizing net recovery, New Growth Advisors undertook to sell the going concern. An offering memorandum was prepared and a large listing of potential buyers was created. After a broad marketing effort, New Growth Advisors was able to uncover a number of interested parties, one of which came forward to enter into a purchase of this existing operation.
This was approved quickly by the Court.
This resulted in:
* these much needed Dayton-area jobs being retained.
* this under-utilized manufacturing facility being purchased by an entity that had additional space requirements and could use the high-quality manufacturing space afforded by this purchased facility.
* retention of the family members to run this business.
* improved working capital position of the company to better serve its long-term customers.
* no interruption of supply to these customers.