Thank you to the Detroit Chapter of the Turnaround Management Association for honoring DWH with the 2021 Small Company Turnaround Award for our work on Miller Tool & Die. Congratulations and a huge thank you to the other firms who also worked on this project, Strobl Sharp and Miller Canfield.

 

Overview

Miller Tool & Die (MTD) is a leading manufacturer of specialty machines and assembly lines for a variety of industries including Automotive, Appliance, Energy, and Military. MTD served customers globally. Miller Technical Services (MTS) is an FDA-registered Medical Device Manufacturer specializing in the manufacturing and assembly of medical devices.

The Situation

  • Ownership wanted to sell MTD but were prevented by collective bargaining issues. COVID added significant cash flow challenges to MTD creating an immediate cash flow need in order to complete current programs in production. MTD had not identified additional sources of funding.
  • Complicated debt structure with MTD and MTS jointly and severally co-borrowers and guarantors on a revolver and term loan (“Joint Debt”).
  • MTS leased space from a related party who had a mortgage with MTD’s bank.
  • Union contract covered the majority of employees at MTD.
  • Unrelated third-party debt was in place which was using some assets as collateral.

The Solution

  • Revised structure was in the form of a pre-packaged DIP financing for MTD and a one-year forbearance agreement for MTS.
  • MTD & MTS: Separated revolving lines of credit.
  • MTD: All bank term debt was rolled into DIP financing so bank became the priority lender.
  • MTD: Funding done to a 13-week cash flow budget with weekly reporting against budget to bank and court.
  • MTD: All assets/customer product had to be paid for prior to leaving the facility.
  • MTS: Needed to re-bank within the next year.

The Outcome

  • MTD: Increased forecasted revenue in bankruptcy by $320,000+.
  • MTD: Decreased forecasted disbursements in bankruptcy by $310,000+.
  • MTD: Successful sale of the business to a third party during bankruptcy.
  • MTD: Subchapter 5 was filed Dec 2020 with a plan confirmed by the court in April 2021.
  • MTD: Unsecured creditor payments – 2% of claims.

 

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