A $1 billion merchant developer was adversely impacted by the 2008 downturn in the commercial real estate market. Several of its related entities had filed for bankruptcy protection or were otherwise in the process of liquidating. After defaulting on its loan covenants, the company was put up for sale. The company had several sound development projects at various stages, but did not have the liquidity needed to complete them. The company had $500 million of secured debt, $50 million of unsecured debt and lacked sufficient cash resources to satisfy those claims. The company engaged Lighthouse to determine the best option to maximize value for all stakeholders.
Lighthouse started by negotiating a multi-year forbearance agreement, allowing the company time to sell its assets in an orderly fashion. Lighthouse then implemented an employee incentive plan to ensure management continued involvement throughout the entire engagement. Once the situation was stabilized, Lighthouse worked with management to develop and manage a sales process.
Business operations and all remaining assets were sold during the sale process generating net proceeds in excess of $550 million and enabling the company to pay its secured and unsecured creditors in full.