Automotive Dealerships
Financial Advisor to Company
Bill Heard Enterprises, Inc. was one of the nation’s largest Chevrolet dealerships including 14 locations across the Southern United States from Orlando, Florida to Las Vegas, Nevada. At its peak, the dealerships had gross revenues in excess of $2.5 billion and averaged over 6,000 vehicles sales per month. Faced with the perfect storm of high gasoline prices, declining credit availability, and finally, the Wall Street financial crisis, Bill Heard filed for Chapter 11 bankruptcy protection in September 2008. DSI was retained by the company to assist in the orderly wind down of the dealership operations. With DSI assistance, eight of the dealerships were sold as going concerns, despite the crisis in the auto industry. The remaining dealership franchise agreements were terminated and the car and parts inventories were returned to the manufacturer for refunds. A Liquidating Plan of Reorganization was confirmed in October 2009, which may result in distributions to the unsecured creditors.
DSI Team: Fred Caruso, Liz Lynch, George Shoup, Eric Sweitzer
Public Sector
Replacement Manager for Capital Coin Funds I and II
DSI was designated Replacement Manager by the Ohio Attorney General and the Ohio Bureau of Workers' Compensation (BWC) to wind down Capital Coin Fund I and Capital Coin Fund II and to recover $50 million invested in the coin funds on behalf of BWC. The BWC appointed DSI to manage the two troubled coin funds, which had been operated by Ohio coin dealer Thomas W. Noe and were the center of several major investigations and audits by state and federal authorities. DSI analyzed the key economic factors involved in securing the assets and ensuring recovery of the highest net return to the State, investigated causes of action and supervised litigation stemming from Mr. Noe’s misappropriation and mismanagement of the funds. As a result of our efforts, DSI was able to return to the State the BWC’s full $50 million investment.
DSI Team: Bill Brandt, Bill King, Fritz Reed, Yale Bogen & Jill Costie
Law Firm
Financial Advisor to Chapter 11 Trustee
Dreier, LLP was a prominent New York law firm comprised of more than 250 attorneys. The firm maintained additional offices in Stamford, Pittsburgh, Albany, Los Angeles and Santa Monica. The principal and sole equity partner of the firm, Marc S. Dreier, was convicted of operating a massive Ponzi-type scheme that purportedly sold fictitious notes to well-known hedge and private equity funds. Our firm was appointed as Financial Advisor to the Chapter 11 Trustee in the Dreier, LLP bankruptcy case. This role entails providing administrative support to the Trustee by preparing the Statement of Financial Affairs and Schedules, monthly reporting, cash management and budgeting, as well as providing all necessary administrative and logistical support in the wind down of the law firm and the liquidation of its assets. DSI has supported the Trustee's investigation through forensic analysis of the debtor's financial activities in order to prepare actions to avoid preferential and fraudulent transfers and prosecution of other claims and causes of action.
DSI Team: Joe Luzinski, Yale Bogen, Bill King, Eric Sweitzer & Brian Murphy
Apparel
Financial Advisor to Unsecured Creditors' Committee
When London Fog, a dba for PTI Holding Corp., filed its chapter 11 bankruptcy petition, there was a significant amount of secured debt and little hope of recovery for unsecured creditors. DSI was engaged as Financial Advisor to the Official Committee of Unsecured Creditors and in that capacity participated in various liquidation transactions designed to maximize value for creditors. With DSI’s analysis and input, the company conducted going out of business sales of its retail locations, sold its operating business units as going concerns, and sold its intellectual property, including the London Fog brand trade name. DSI also investigated transactions with insiders and supported litigation against prior management, and evaluated the merits of substantively consolidating the various affiliated debtors. As a result of these efforts, the secured lenders received significant proceeds and unsecured creditors received a meaningful distribution on their pre-petition claims.
DSI Team: Pat O'Malley, George Shoup, Alan Omori, Matt Farnsworth & Matt Braun
Food & Beverage
Chapter 11 Trustee
Brad Sharp was appointed as the Chapter 11 Trustee for Reynaldo’s, one of the largest manufacturers and providers of Mexican food items to restaurants and supermarket chains in the Southern California area, which had $22 million in annual sales and negative earnings. DSI was able to take this failing business and, through negotiations with its lenders, vendors, landlords and other stakeholders, manage it and return it to operating stability. Once stabilized, the business was sold as a going concern, generating proceeds that allowed a substantial dividend to unsecured creditors.
DSI Team: Brad Sharp, Geoff Berman, Matt Braun, Tania Kingsbury & Matt Sorenson
Automotive Parts Manufacturer
Financial Advisor to Official Committee of Non-Union Retirees
Together with the Retiree Committee’s counsel and its members, DSI achieved a result for retirees beyond all initial expectations. The company expressed its intent to terminate all retiree benefits and, in addition, took the legal position that it need not comply with the mandates of Section 1114, which are essential in protecting retirees. On behalf of the Retiree Committee, DSI analyzed the financial condition of the company and its international affiliates, evaluated the various proposals and counter-proposals regarding benefit modification and served as an expert witness, preparing a report for the court and deposition testimony. In what was literally a settlement on the courthouse steps, the company reached an $86.5 million agreement with the Committee that allowed a continuation of benefits.
DSI Team: Pat O'Malley, Brian Calvert, Brian Weepie, Cathy Vance
Health Care Related
Chapter 7 Trustee (Elected)
Joe Luzinski became Trustee in the Chapter 7 bankruptcy of Abraham D. Gosman after his Chapter 11 case failed. Mr. Gosman had ownership in numerous public and private companies, partnerships and business ventures in the medical and real estate development industries, owning, operating and managing nursing homes and assisted living facilities throughout the United States. Mr. Luzinski’s administration of the Gosman estate has included, among other things, review and analysis of Mr. Gosman’s complicated financial affairs, including disentangling business and personal financial matters, workout and sale of operating assisted living facilities and real estate ventures, and prosecution of a multi-million dollar fraudulent transfer action involving Mr. Gosman’s real and personal property.
DSI Team: Joe Luzinski, Clare Pierce, Bill King, Yale Bogen & Matt Farnsworth
Steel Manufacturer
CRO, Chairman & Director
DSI supplied the CRO, Chairman and the sole remaining Director to supervise the wind down and the collection and distribution of assets of the publicly traded, fifth largest U.S. integrated steel manufacturer. The work also required the termination of the numerous health and welfare/benefit plans, the supervision of the claims objection process, preference litigation and significant claims litigation.
DSI Team: Steve Victor & Matt Farnsworth
Manufacturing/Metal Stamping
Financial Advisor to Secured Creditor
As consultant to a secured creditor with an $18 million claim against Precision Tool, DSI worked with the company and one of its major customers to develop a reorganization plan under which the customer gave credit support to our client. This led to full recovery by the secured creditor.
DSI Team: Pat O'Malley, Jim Moore, Fritz Reed, Yale Bogen & Brian Weepie
Health Care
Post-Confirmation Trustee & Sole Remaining Officer
DSI has served as the Post-confirmation Plan Administrator and Sole Remaining Officer of these non-profit hospitals after confirmation of the hospitals' plan of liquidation and the sale of the operating assets of the three hospitals to Universal Health Services. DSI took possession of more than $120 million in sale proceeds, paid the bondholders an initial payment on their debt of $102.7 million, and thereafter oversaw the post-sale reconciliation process with the buyer, reconciling claims and pursuing avoidance actions. Unsecured creditors and any net recoveries to the bondholders received their pro rata share of the funds reserved from the pre-confirmation asset sale and the bondholders recovered an additions $15 million from the recovery of Medicare reimbursements and liquidation of other assets not sold as part of the pre-confirmation asset sale.
DSI Team: Geoff Berman, Matt Braun, Matt Sorenson & Tania Kingsbury
Agricultural Cooperative
Financial Advisor to Company
Bradley D. Sharp, through DSI, was engaged as a financial consultant to United Producers, Inc., in Columbus Ohio. UPI, a cooperative organization owned by farmers and ranchers in the Southeast and Midwest, served as a middleman in processing livestock transactions worth up to $1 billion per year for tens of thousands of farmers. It also offered loans and related products through a subsidiary, Producers Credit Corporation. Mr. Sharp and DSI worked closely with the company's secured lender, cooperative members and customers to quickly stabilize and improve the company's operations so that farmers and purchasers did not lose trust in the market process. DSI was recognized for its work in the UPI reorganization, having been listed as a "Successful Restructuring" by Turnarounds & Workouts.
DSI Team: Brad Sharp, Bill King, Fritz Reed, Matt Braun & John Wheeler
Technology; Graphics
Chapter 11 Trustee
DSI, through Bill Brandt as Chapter 11 Trustee, brought litigation alleging fraudulent conveyance and other theories cause by the pre-dissolution action of the debtor. A related action against officers and directors was successfully settled.
DSI Team: Bill Brandt, Joe Luzinski, Clare Pierce, Kyle Everett & George Shoup
