[danra]

Food service business does 500K to 1mil per month coming out of BK. At the stage where no more debt can be added. Seeking 500k for very profitable acquisitions to bring in house. Here is the story.

As of Oct 23rd, food service business entered Chapter 11 reorganization. This
reorganization will last until the end of March. The purpose of this reorg
is to clean up legacy bank debt, creditor debt, etc on the balance sheet,
complete 2 acquisitions and bring in-house another company that does business with them.

They are requesting $500k in working capital to be used to bridge
the gap between now and the end of January. During this time period this
will allow the company to complete the following:

1. Recapture core sales of approx $185k a week. Provide working
capital for inventory purchases and cover operating expenses.
2. Bring $400k a week in business from new acquired commpany. The owner of the acquired business to acquire is winding down his company over the next few weeks. He will be
moving his sales over to the client's company under a commission agreement the first
week in Jan 2016.
2. Complete the acquisition of yet another company. This company will move in under a
sub-let and Administrative Management agreement. This will allow both
companies to merge resources while food service business is under reorg. Upon exit, all
assets will will move to NEWCO. This will add $110k a week in sales.
3. Complete the acquisition of another company. This company will move in
under a sub-let and Administrative Management agreement. This will allow
both companies to merge resources while Shelleys is under reorg. Upon exit,
all assets will will move to NEWCO. This will add $150k a week in sales.
4. Food service businesses exit plan will be formally presented to the court in
NY in Jan for approval.
5. Upon completion of negotiations with the bank and creditors, Food service business
will exit reorg with fresh capital lined up from one of three potential
lenders.

Right now owner will pay any rate.

Any takers?

[dpFund]

My gut is that you have an uphill battle with an open BK. But there will probably be some takers. Money is (almost) always there, for a price!

[VFG]

If your client sells on open terms I'm happy to introduce you to some factoring companies who can provide DIP financing for this client as long as the courts approve it.

Good luck!

[Jstarr]

if he has real estate and the value is there i could do it ...

[Zach]

This sort of thing is a potentially great fit for WBL. We have structured loans like this on occasion. Here's why I think we are a good fit:

1. He just completed BK, that's fine with us

2. We can structure interest-only payments with no prepayment penalty after 6 months

3. We can use his current business AND the cash flow from the business he is acquiring

4. We may be able to structure it with no payments for a month or two to help him get off the ground

5. The loan size is fine for us (our average loan size is much higher than the industry norm)

The only catch with us is that we would require real estate collateral. A friend, family member, or investor can always put the collateral up for the client if he doesn't own any himself.

If you have a few minutes, give me a call and I can review what this client would probably be looking at.


*****nevermind, just saw that the bankruptcy has not been discharged yet

[FUNd]

NOBODY will loan money to someone with an open BK. In fact it's not even legal to borrow money when you are in federal bankruptcy proceedings. BOB is right again, there will be some takers. More like NO takers.

[bdshaw]

Danra, a few questions.
First why do you say the company is at the point where no debt can be acquired? The guest thing that happens in a Chapter 11 is your suppliers put you on cod. There will be no unsecured creditors unless the court provides some protection. The debtor may always borrow on a secured position anytime during the BK. Usually that financing is arranged before the filing.
There are a lot of details missing such as bottom line numbers but with everything that has to fall into place to make this work why not finance the two companies to be acquired instead of the debtor.
My last question is will the court allow the creditors to be raped over the coals for the benefit of the existing owners and the owners profiting from the sale.
The courts primary concern is to protect and make as whole as possible the existing creditors.
Bob