Specialty Finance Company

Company Overview

The Company is a specialty finance company that provides loans to plaintiffs in a variety of personal injury and workmen’s compensation cases. The loans are non-recourse and are paid only upon resolution of the case.

Engagement Overview

At the time of our engagement, the availability of senior debt for finance companies quickly declined due to macroeconomic concerns and industry performance.

Fort Dearborn was engaged by the Company to perform a review of its cash flows and portfolio performance with the goal of maintaining its senior debt facility.


Fort Dearborn reviewed the Company’s loan portfolio and performed analyses to determine that the portfolio had an average maturity of 2 years, thus extending the time to required to collect on loans and slowing cash receipts.  This resulted in the Company being unable repay its senior on the loan under its original terms.


At the request of the Company’s lender, Fort Dearborn performed a further analysis of the Company’s portfolio and cash flows in order to assess and structure an adequate senior debt repayment plan.


Subsequently, when the Company elected to merge with a competitor, Fort Dearborn provided key information and due diligence analyses on the loan portfolio for the senior lender and merging competitor.

Results
•  Fort Dearborn provided due diligence and loan analysis for the senior lender resulting in an extension of the loan.

•  Fort Dearborn provided cash flow models of loan portfolio payouts under a variety of scenarios to determine the appropriate loan structure.

•  Fort Dearborn’s analysis assisted the client in merging its operations with an industry competitor resulting in improved profitability by leveraging administrative costs.