CoServ Electric

The Situation

  • Electric cooperative in North Texas that supplied electric service to rural communities for over 35 years; growing community in Dallas/Ft. Worth metro area expanded company’s customer base, leading to offering of new services with developer provided capital
  • Secured lender tightened line of credit; when funding ceased company had $1B+ of debt on an $150MM service product with additional services generating approximately $30MM; other incomplete service lines resulted in inability to raise new capital for build out of utility infrastructure which precipitated a bankruptcy filing

Role(s)

Bankruptcy Fiduciary

  • Court Appointed Examiner

The Work

  • CR3 professional was appointed as Examiner of the estate
  • Engaged to review representation of various constituencies in the case and ensure no conflicts and all constituencies were represented
  • Reviewed inter-company transactions and validity
  • Examiner was asked to assist in negotiations with the parties
  • A separate committee was appointed for a subsidiary to avoid conflicts and several debtor and non-debtor transactions were altered to avoid any conflicts

The Results

  • Six months into plan, company exceeded EBITDA plan by 6% and cash projection was exceeded by $2.3MM
  • Achieved $10MM of annual operating expense improvements on <$30MM of revenue
  • Dramatically increased customer demand
  • Increased proposal volume by 20% (with reduced number of sales representatives), increased proposal win rates by 42%, and sales awards by 30% in one year

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Overview

  • Energy
  • Bankruptcy Advisory

Engagement Team