Holiday Cheer Brings Refinancing Deal

The sparkling lights projecting from the Cobb Energy Performing Arts Centre was the yuletide pickup my colleagues and I needed after weeks spent searching for answers to save a company. Little did we know we would find a solution at the annual holiday party organized by the Atlanta TMA Chapter and the Atlanta Commercial Finance Association. The festivities spread over three floors, with a bar in the lobby, hors d’oevres on the second level and desserts on the third. Approximately 150 people were there with gifts for the Toys for Tots program.

Rob Barnett, Paul Share and I were planning to attend that evening but we were having difficulty mustering the enthusiasm to go out and put on our happy faces. It appeared as though our case was on a cheerless course that I had seen before, ironically, during the holidays. In those cases, the client either: a) endured the misery of managing the liquidation of their business or b) suffered through painful staff layoffs.

Our client, a cabinet manufacturer and supplier to multi-family housing developments, had reached the end of the line with its lender. The company was in default again and the lender closed the door on further funding.

Our team began developing an efficient and value-driven wind down plan and called potential investors and other lenders as a last-ditch effort to save the company. Management had cut to the bone and reached a break-even level. The lending freeze persisted, so we knew we could not count on refinancing. The cabinet maker had significant collateral, but its assets were heavily weighted to equipment and real estate.

The dread of the onset of an upcoming liquidation process was upon us.

With mellow strains of a four-piece jazz ensemble playing holiday music in the background, Rob, Paul and I made the rounds. Rob struck up a conversation with Jim Miller of FirstCity Crestone (FCC). Jim began to talk about his current business interests and something just snapped into place: FCC might be a good fit for the cabinet maker. It offered a unique approach - a hybrid of asset-based lending and private equity investment.

The team receives the Transaction
of the Year Award at the 2010 TMA
Annual Convention.
That conversation was the beginning of a deal that saved the company, retained 180 jobs, and allowed the senior lender to be repaid in full. Our team also earned the 2010 TMA Transaction of the Year Award in the small company category. Read about it here.

That holiday party represents a great example of why TMA matters in our business. It’s an example of the importance of networking and the role the Association can and does play in providing opportunities to network.

The holidays are here. Put your best foot forward.

Best wishes!