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Eileen Frino
COO & Director, Other Professionals
Eileen Frino is a seasoned finance professional with over ten years of experience spanning investment banking and credit advisory to operational and regulatory consulting.
James Katchadurian
Partner, Partners
James Katchadurian has significant experience in several highly visible insolvency matters.
William Snyder
Partner, Partners
With executive and entrepreneurial experience spanning close to 40 years, William Snyder has restructured, managed, and guided a multitude of companies in a wide variety of industries.
Barak Tulin
Partner, Partners
Barak Tulin is a creative, analytical, and effective executive with over 20 years of experience in performance improvement, restructuring and turnaround, financial planning and analysis, transaction services and general management.
- Stabilized cash flow
- Executed an out of court balance-sheet reorganization
- Developed successful recapitalization plan
The home security provider had $7MM in recurring monthly revenue (RMR), but was suffering from declining industry trends, increased competition, and significant technology upgrade costs. The company engaged CR3 professionals who quickly determined that an operating company bankruptcy would be detrimental to the company’s revenue, would rapidly destroy the value of the estate, and would not address the underlying problem of excessive leverage. The team began preparations for bankruptcy as a defensive measure and supported lender negotiations. The company eventually executed a successful out-of-court balance-sheet restructuring with a private equity firm, which injected new equity into the business and kept several of the existing lenders in the capital structure as either debt or equity holders. CR3 professionals helped the company stabilize cash flow while it determined its recapitalization options.
The Situation
- Provider of home-security installation and monitoring services with large branch offices and $7MM in recurring monthly revenue
- Company was suffering from declining industry trends, increased competition, and significant one-time costs due to technology upgrades, specifically with converting customers with 3G radios to LTE ahead of carriers’ sunsetting dates
- Debt-service costs rose as leverage ratios increased following acquisition that company funded with debt instead of equity
- Company had a very large out-bound call center that was critical for both customer safety calls and Marketing
The Work
- Determined quickly after being engaged that operating-company bankruptcy would be detrimental to company’s revenue and would rapidly destroy value of estate, when ultimately underlying problem of excessive leverage could be resolved out of court
- In support of eventual balance-sheet restructuring, engagement team projected and managed liquidity under multiple proposed restructuring scenarios
- Began preparations for bankruptcy as defensive measure, including potential holding-company bankruptcy in which operating entities would be restructured out of court
- Supported negotiations with over 15 members of company’s lender group
The Results
- Able to validate restructuring plan that maintained vibrant call centers to keep top-line growing and to ensure safety of its customers
- After several standoffs between first- and second-lien lenders and company, company eventually executed successful out-of-court balance-sheet restructuring with private-equity firm, which injected new capital into business and kept several of existing lenders in capital structure as either debt or equity holders
- Helped company stabilize cash flow while it determined its recapitalization options
- Company subsequently merged with a competitor to generate selling and operating synergies
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