Serving as CRO and Providing Financial, Operational, and Sell-Side Advisory
The Situation
A 14-store grocery chain established serving New York, New Jersey, and Connecticut with $700M in revenue and approximately $250M of secured debt was facing liquidity issues brought on by underperforming locations and growing pension liabilities. Mackinac Partners (acquired by Accordion in 2021) was engaged as CRO and financial advisors to prepare the Company for a Chapter 11 process and execute a sale of some or all the Company’s grocery locations. The Chapter 11 process was commenced before the onset of the COVID-19 pandemic in New York City. Shortly after filing Chapter 11, the Company was struck with a ransomware attack that shut down most of the Company’s IT systems, including ordering/procurement.
Services
Interim CRO / Restructuring Advisory
Bankruptcy Services
Lender and Stakeholder Negotiation
Liquidity Management
The Execution
- Worked on the frontlines with Company management to manage the supply chain.
- Advised on the sales process, which included a virtual auction in the early spring of 2020 to three different buyers for eight stores and the distribution center.
- Reduced SG&A costs and closed three unprofitable locations, after which a secondary sale process was consummated in a series of private sales and one mini-auction in the summer of 2020 for three additional stores.
- Assisted in the negotiation and global settlement between multiple lenders, the grocery worker’s union, and the unsecured creditors – which resulted in the confirmation of a Chapter 11 Plan of Reorganization.
The Results
As financial advisors and CRO, our team successfully managed a turbulent Chapter 11 process with multiple unforeseen obstacles including a major ransomware attack, and the uncertainty of a global pandemic. Under our guidance, the Chapter 11 process resulted in the sale of 11 grocery locations and the distribution center, the confirmation of a consensual Plan of Reorganization, and the preservation of more than1,700 jobs.