In re National Sign and Signal Co.
Jan 01, 2012OUTCOME: Business Saved
The Debtor and its secured lender in this matter had been battling in the courts for several years and could never come to terms. Their dispute had been before the United States District Court for the ... Western District of Michigan and through at least two rounds in the State Court. I was contacted by the Debtor the day prior to a State Court motion to appoint a receiver in October of 2012. The Debtor was being represented by Honnigman Miller Schwartz & Cohn. I was able to negotiate an extension of the receiver motion for approximately 2 weeks. Unfortunately, the Debtor and its secured lender (Fifth Third Bank) could not reach terms and I filed for Chapter 11 relief for the Debtor on October 15, 2012. From the very beginning it appeared that the Debtor would be forced into liquidation as its lender seemed to be motivated by closing its file on the matter as opposed to making a business decision based upon its collateral position. The Debtor had become frustrated and angry with its lender, which made it difficult (at times) for the management to make sound business decisions. In the balance was the Debtor’s 70 year old business, which was very successful, with sales of $2,000,000.00 per year employing 15 to 20 employees. The bankruptcy was rather difficult at first, with several cash collateral battles and its lender’s attempt to appoint a trustee. . At the hearing scheduled for the appointment of the trustee, the parties were able to finally reach an agreement as to all terms for a confirmable Plan. The Debtor was filed a consensual Chapter 11 Plan on March 1, 2013, which was confirmed on April 12, 2013. The Chapter 11 was filed because there were no other options and it was the only thing my client could do. In the end, it actually received more favorable terms than what was offered and rejected in October. This matter is an excellent example of what the Bankruptcy Court, generally, and the Chapter 11 process more specifically is able to accomplish. The rights of the Debtor within bankruptcy and the oversight and protection it offers to all interested parties; finally allow the warring parties to put together a meaningful and economically viable agreement that all can live with.
