Experience demonstrated through difficult situations.

The situation

A shareholder held a 50% interest in a California agricultural company. The other 50% was held through a US entity ultimately owned by an overseas company, in which the client also held a minority interest. Weak agricultural markets placed the US operation under increasing financial pressure and its asset-based lender became concerned about the continuing position.

The challenge

The matter involved overlapping ownership interests, competing shareholder priorities, lender exposure and the deteriorating finances of the operating company. The client required advice directed to his own economic position while complex negotiations took place among the shareholders, overseas parent and lender.

The strategy

Simon Gidney advised throughout the negotiations and devised a restructuring strategy under which the business would enter an assignment for the benefit of creditors. The operating assets could then be acquired by the overseas-owned group with replacement funding from the existing asset-based lender.

The result

The lender approved the proposed structure and appointed a major restructuring firm to administer the formal process. He separately placed the client's private company into an assignment for the benefit of creditors and continued to advise the client in connection with his minority interest and the wider negotiations.

The situation

A previously successful and well-established US business that designed and manufactured specialist routing equipment for the printed circuit board industry came under intense lender and creditor pressure following a sudden and severe downturn across the industry.

The challenge

The strategy

The result

The restructuring preserved the operating business, protected the value of the Mexican manufacturing assets and enabled the operations to continue under a newly financed ownership structure. After two years of trading, the reorganized company was advised on the successful sale of its US and overseas operations to a large US engineering group.

The situation

Simon Gidney was introduced to the company by its bank, following his successful work with the bank on an earlier restructuring assignment. The company, an established US manufacturer, had been sued for alleged patent infringement by a multibillion-dollar overseas competitor. Believing the claim to be without merit, it defended the action and secured a favorable initial judgment. However, the litigation had already consumed approximately $1 million, and the competitor's subsequent appeal left the company without the financial resources required to continue the legal battle while also funding its operations.

The challenge

Despite securing a favorable initial judgment, the cost of the patent litigation had exhausted the company's financial resources and left it without sufficient working capital to fund ongoing operations. The business combined US-based warehousing and distribution with a manufacturing subsidiary in China, whose operations also had to be protected. At the same time, the company remained exposed to an appeal pursued by a multibillion-dollar competitor with vastly greater financial resources.

The strategy

The result

The operating business and its assets were preserved as a going concern despite the financial damage caused by a patent claim that the company believed to be without merit. The reorganized business was subsequently advised on a significant manufacturing joint venture in China involving a third-party US investor and a major Chinese manufacturer, helping position the company for its next stage of development.

The situation

A US agricultural company operating multiple processing depots across California and Washington encountered serious trading difficulties. Its principal commercial bank accelerated the company's loan facilities and issued a notice of foreclosure. The secured debt involved two institutional lenders: the commercial bank and the Export-Import Bank of the United States, the federal government's official export credit agency.

The challenge

By the time Simon Gidney was appointed, the company had already received a notice of foreclosure and was on the brink of collapse. Within 24 hours of his appointment, he travelled to San Francisco with the owner and chief financial officer to meet the principal commercial bank. He secured seven days of breathing space in which to develop and present a credible restructuring plan. The bank acknowledged that appointing an experienced external restructuring adviser had been an important and constructive step.

The strategy

The result

The company returned to profitability, albeit at a reduced level of turnover. Within six months it had secured replacement banking arrangements, and within twelve months the owner sold a 70% interest in the business to a major overseas investment group.