Lee Steel and its affiliates (“Lee” or the “Company”) were in discussions with the Huntington National Bank (“Huntington” or the “Lender”) regarding accommodations to meet Lee’s anticipated liquidity needs. Huron was engaged to dimension the potential cash requirements, which were significantly worse than Lee had expected.
With the assistance of Huron, Lee and Huntington negotiated a term sheet to provide increased liquidity and deferral of principal requirements to allow Lee time to improve operations and withstand the expected downturn in market pricing. When it became clear the Company could not reach resolution on terms with its secured Lender and unsecured creditors, Huron prepared the Company for a bankruptcy filing and was appointed as Chief Restructuring Officer (“CRO”) and Treasurer.
Throughout the case, the Company faced operational challenges from continued deterioration in steel prices and limited confidence from customers and vendors due to the Company’s bankruptcy filing. Because of the deteriorating conditions, Huron worked diligently to stabilize operations and maximize cash flow during the case to allow the Company to stay in compliance with the terms of its DIP financing and effectuate a successful sale. Huron also consolidated the operational footprint to make the Company a more attractive acquisition target and maximize value.
Huron’s investment banking team developed a comprehensive sale process, including reaching out to over 100 potential purchasers and entertained bids on 3 different groups of assets in an effort to maximize value. While adding significant complexity in terms of process and execution, accepting separate bids for multiple groups of assets and conducting separate sale transactions resulted in realization of maximum value for the estate.
The sale proceeds generated through the auction process, coupled with the significant cash balance on hand that the Company generated throughout the case, led to a full payout for the secured Lender and the potential for a meaningful recovery for unsecured creditors, which were previously expected to receive either no or a negligible recovery.
The team included: Laura Marcero, Jamie Lisac, Matthew Fisher, Matthew Kazin, Ken Fontaine and Breann Shrock-Kueber.
Securities transactions provided by Huron Transaction Advisory LLC, member FINRA/SIPC.