Case Study

The Fire

In January 2017, a formerly publicly traded, large South Texas based oilfield services company, its subsidiaries, and affiliates, (“the Company”) filed a Chapter 11 case together with its pre-packaged plan of reorganization (“the Plan”). On March 29, 2017, the Plan was confirmed by the Houston bankruptcy court. The Company still had over $50 million in secured debt that was to be repaid in four (4) years. During the ensuing three years, the Covid-19 pandemic occurred coupled with the global collapse in oil prices. 

The company suffered from $100 million in losses with growing and delinquent trade accounts payable totaling over $55 million, including substantial tax claims.

In its final two years of operation, it faced several hundreds of millions of dollars in personal injury lawsuits resulting from multiple accidents and loss of lives.

Struggling to sustain operations, the Company was unable to make its interest and principal payments.

Facing continuing poor equipment utilization, pricing pressures, substandard operating results and dwindling liquidity, the Company recognized it was essentially out of business.

The Company and its lender’s agreed to a foreclosure and an independent, arms-length sale to maximize both enterprise and asset values while retiring its secured debt. Unfortunately, post-sale over $60 million remained owed to the secured lenders.

The Rescue

Supported by the lender group, the Company’s existing board, shareholders, and management, MACCO was engaged as Winddown Manager, Financial Advisor, and became its sole director to winddown the Company while maximizing remaining assets and limiting both liability and further risks. 

Deliver an expedited and comprehensive assessment that analyzed the company's current situation and financial position.

Assume all remaining management and governance responsibilities.

Provide comprehensive cash forecasts, budgets, and cash management.

Conduct, with multiple legal counsel, an assessment of and settlement prospects to over twenty (20) separate personal injury, breach of contract, collection, and similar types of litigation.

Development of a cost-effective winddown plan combined with goals and benchmarks that included: o Researching and identifying any additional assets.

Multiple successful asset and real estate sales. Yard facilities clean-up and environmental remediation, including those mandated by Texas Railroad Commission.

Assessment of, prosecution and/or settlement of threatened or actual litigation. Cost-effective accounts receivable collection.

Management of State of Texas sales and use tax audits. Winddown and distribution of the Company’s 401K plans. Management of multiple legal, accounting and specialty tax advice professional firms.

Providing appropriate notice to creditors and parties-in-interest together with effective management of those constituencies.

Producing budgets, variance to budgets reports and similar weekly and monthly accounting, cash management, and lender reporting requirements.

Achieving forgiveness of a $10 million, Covid period, PPP Loan.

The Result

Over the course of fifteen (15) months, in highly challenging and complex landscapes, MACCO seamlessly managed the affairs of The Company to preserve cash, maximize returns and reduce risk that returned over $5.1 million to the secured lender after payment of all winddown and related professional fee costs.