DSI'S Role

Workout Consultant to ABS Industries and CEO to Colfor and Colmach

Services Provided

  • Crisis & Interim Management
  • Asset Sale
  • Financial Restructuring
  • Debt Refinancing

ABS Industries, Inc., Colfor, Inc. and Colmach, Inc.

Case Highlights

  • Managed parent and became subsidiaries’ Chief Executive Officer
  • Orchestrated sale well in excess of stalking-horse bid

Case Narrative

ABS Industries, manufacturer of automotive drive and transmission components, engaged DSI as its workout consultant following the discovery of a $15 million inventory overstatement.  Subsequently, DSI became CEO of ABS’s two subsidiaries, Colfor and Colmach, pursuant to a forbearance agreement reached with creditors and automotive customers.  DSI negotiated a consensual cash collateral agreement with 28 lenders and, following extensive meetings with the affected constituencies, an agreement was reached on the sale of the companies through a competitive bidding process.  During the period of time leading up to the sale closing, and under DSI’s management, operating losses of $1 million per month were reversed and the company began experiencing profits on a monthly basis approaching $500,000.  Through the bidding process DSI orchestrated, the companies were sold within five months of the bankruptcy petition for $38 million, which was an $11 million increase from the original stalking-horse contract.