Mark IV Industries, Inc.

Background

Mark IV was a designer, marketer, distributor and manufacturer of industrial, transportation and automotive products and systems with over 4,200 employees and operations in 16 countries.

In late 2008, the financial performance and liquidity of the company deteriorated in large part due to the global decline of automotive volumes combined with the significant leverage it was carrying.

Project

In February 2009, a Zolfo Cooper senior professional was appointed Chief Restructuring Officer to assess the company’s current situation and design and implement a turnaround plan. Activities of the Zolfo Cooper team included:

  • Procuring a forbearance which relieved the company from paying upcoming interest and debt payments.
  • Preparing a comprehensive communications package for customers, suppliers, employees and other stakeholders.
  • Designing and negotiating debtor-in-posession (DIP) financing required for the Mark IV to effectively navigate the Chapter 11 process.
  • Managing the 13-week cash flow forecasting process throughout the Chapter 11 process.
  • Re-negotiating the terms of legacy liabilities.
  • Designing and negotiating the key employee incentive program (KEIP) to motivate key company employees to stay through the Chapter 11 process.
  • Sizing and negotiating the exit financing facility required for Mark IV to successfully emerge from Chapter 11 and return to normalcy.

Outcome

As a result of the steps taken by Zolfo Cooper, Mark IV was able to minimize the impact of the filing on their operations. Customers did not reduce orders or move programs to alternative suppliers; and trade and credit contraction was significantly lower than forecasted.

Additionally, the company was able to reduce health care related legacy liabilities by approximately 50% through union negotiations, and also significantly de-levered its balance sheet upon exiting Chapter 11.