REFINANCING | RESTRUCTURING | BANKRUPTCY
StoneTower Capital specializes in M&A, Corporate Finance and Restructuring for privately owned, middle market companies. StoneTower Capital offers comprehensive financial and advisory solutions at all stages of the business lifecycle. This includes advisory that addresses even the most difficult situations that a business might find itself in -- our advisors are experience in helping companies navigate tough times and getting business back on track.
EXIT & TRANSACTION
Financial restructuring is the reorganization of a business's assets and liabilities. The process is often associated with corporate restructuring, where an organization's overall structure and its processes are revamped.
WHAT IS RESTRUCTURING?
Typical Restructuring Client:
- to +EBITDA
Troubled Banking Relationship
Need for Financing
Need for Equity
Loss of Major Customer
Loss of Major Vendor
Downturn in Market
Debt restructuring is a process used by companies to avoid the risk of default on existing debt or to take advantage of lower available interest rates. Debt restructuring can be carried out by individuals on the brink of insolvency as well.
A debt restructure might include a debt-for-equity swap, when creditors agree to cancel a portion or all of the outstanding debt in exchange for equity in the company.
A company seeking to restructure its debt might also renegotiate with its creditors to "take a haircut"—where a portion of the outstanding interest payments would be written off, or a portion of the principal will not be repaid.
OUT OF COURT SOLUTIONS
REFINANCING | RESTRUCTURING
DEBT RESTRUCTURING is used when a borrower is under such financial distress that it prevents timely repayment on a loan. This is usually accompanied by delayed AP payments and general lack of liquidity that the business needs to function.
DEBT REFINANCING is used on a much broader basis than restructuring, in which a borrower leverages a newly obtained loan with better terms to pay off a previous loan. There are a number of alternative and special situations lenders that make this type of refinancing possible. If the problem is caught early enough, this is a solution that can help businesses get through a temporary rough period.
BANKRUPTCY AS A LAST RESORT/REMEDY Borrowers should consider the true cost of bankruptcy before engaging in either form of debt repayment strategy. An out-of-court debt restructuring or liquidation has the potential of achieving higher returns for all of the stakeholders at a lower cost. However, sometimes a bankruptcy is the only way to save a company.
CHAPTER 11 | 363 SALE
Chapter 11 is a legal process that involves reorganization of a debtor’s debts and assets. It is available to individuals, sole proprietorships, partnerships, and corporations. It is most commonly used by corporations. The reorganization allows the business to continue operations but under supervision, subject to the debtor’s fulfillment of some of his obligations. Since it is the most expensive of all bankruptcy cases, a business should do a careful analysis of all other bankruptcy alternatives before settling for Chapter 11.
A 363 Sale refers to the sale of an organization’s assets under Section 363 of the US Bankruptcy Code. The sale enables debtors to fulfill their obligations to creditors by selling their assets and using the funds collected to settle their debts.
The purchasers of the assets benefit from the opportunity to acquire valuable assets that are free of liens, claims, or other encumbrances – often at discount prices. The bankruptcy court grants the debtor-in-possession or trustee the power to sell the organization’s assets even when there is an objection from junior creditors, after a court hearing of their petition.
FOR HEALTHCARE FACILITIES
With the impact of Covid 19 rolling through the health care industry, the facility infrastructure segment in particular, is experiencing default on a wide-spread basis.
Lenders need liquidity and we provide that liquidity through our receivership services and transaction support. We understand that these situations are unique and time sensitive; and we are able to respond quickly with expert leadership and assistance.
Our experienced professionals help lenders manage distress in this niche health care segment through a systematic process adapted for each individual situation.