Case Study: Prinz at Home – Note Purchase, Term Loan 2.9MM
Company sales declined considerably and the resulting cash burn depleted the remaining borrowing availability. The sales decline also led to high inventory levels and a significan’t amount of excess product. The lender desired a quick exit from the loan and was not interested in funding a sale process or extended wind-down.
Tiger Finance purchased the bank’s note and worked with management on a dual process strategy whereby the company put in place operational improvements, along with a wind-down of unproductive assets, while marketing the company to competitors. Tiger, in support of the management team, helped finance strategic inventory purchases, who managed expenses, and operated the business for several months.
Ultimately, the majority of the inventory and the intellectual property was sold to a competitor, who hired the sales and design team, and merged the brand into its portfolio. In addition, the owner purchased a portion of the business at a premium, to help fund the wind-down of the remaining business. The remaining accounts receivables and inventory were then used to partially satisfy the remaining obligations of the estate.