Concrete Supply Company

Company Overview

•  The Company is a $200 million producer and distributor of construction materials with more than 20 locations in the Midwest and Southeast.

•  Diversified operations included a deep water port facility, rail loading/unloading facility and agricultural holdings.

Engagement Overview
•  The Company made significant capital investments in long-term strategic assets, financed largely with term debt.
•  Sales declined 50%  with the economic downturn, resulting in significant operating losses and the inability to fund required debt service

•  Fort Dearborn was initially engaged to assist the Company with an assessment of its strategic alternatives together with the preparation of a turnaround and debt reduction plan.

•  During FDP’s due diligence review of the Company’s financial records, we identified a number of accounting issues & irregularities including:
•  Overstated profits due to improper inventory valuation methods and understated bad debts due to poor controls and lack of consistent policies
•  Distorting divisional profitability due to improper allocation of costs among divisions
•  Overstatement of accounts receivable to inflate the Company’s borrowing base

•  Poor performance and ownership/management inability to implement the debt reduction and turnaround plan resulted in the bank group insisting that FDP be hired as Chief Restructuring Officer.
•  FDP corrected Company accounting issues and revised financial statements forecasts and determined cash flow required to support ongoing operations.

•  We created a detailed tactical plan to significantly reduce debt and return the Company to sustainable profitability.

•  Fort Dearborn successfully prevented ownership/management from diverting collateral from creditors during the insolvency period.

•  The Company’s assets were sold in a bankruptcy section 363 sale for the benefit of all creditors.