The leaders of auto-parts manufacturer Remy Worldwide Holdings retained AlixPartners as a "restructuring advisor" (as opposed to interim manager), to help them get through a complicated pre-packaged bankruptcy deal.
Challenge: The first pre-packaged ("pre-pak") bankruptcy in automotive history was extremely difficult to accomplish in such a depressed, cash-intensive industry. AlixPartners was tasked with ensuring that Remy, a global manufacturing company specializing primarily in motors and engine parts, did not run out of cash before its consensual, but highly complex (a complicated, multi-layered capital structure; a lender covenant limiting the use of cash from asset sales; etc.) pre-pak deal could come to fruition, avoiding a "free fall" bankruptcy.
Solution: AlixPartners developed a comprehensive 13-week cash-flow forecasting process, led negotiations with suppliers to increase liquidity by $18 million, and worked with Remy to negotiate with their largest customer, General Motors, resulting in a new long-term supply agreement that gave Remy important breathing room during its reorganization.
Result: When Remy finally filed its pre-packaged Chapter 11 petitions, it was met with almost unanimous support of its unsecured creditors. When it emerged from Chapter 11 just 59 days later, it was able to convert $315 million in pre-petition debt into equity, significantly improving their capital structure.
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