Experienced Leadership Makes Navigating Chapter 11 Easier, Faster, Better

Chapter 11

Sixty days prior to calling us, a $10MM consulting company had filed for Chapter 11 bankruptcy. Unsure how to operate under the bankruptcy rules and unfamiliar with the processes and procedures, the company had not filed required monthly operating reports, yet wanted to exit bankruptcy quickly. The cash was almost gone but significant new contracts with large deposits were in process. Employees were concerned about their jobs, and the unknown nature of Chapter 11.

Momentum Advisors took immediate steps to get all required court reports up to date. The financial system was separated and updated for pre- and post-bankruptcy activity, and a 90-day cash flow was created. Significant new business materialized with large deposits, that allowed the company to pay off more than $3 million in secured debt and create a plan to exit bankruptcy quickly.

After the unsecured creditors’ committee requested that the payback time be decreased from 24 months, a plan was filed and accepted that allowed for 100% payoff with interest within 16 months. Momentum stayed on as the temporary CFO until a full-time CFO was hired, and continued to come back over the next three years to fill in as the temporary CFO when required, or for special projects.

The company was able to exit Chapter 11 in less than eight months, and all creditors were paid in full in the required time frame. All of the employees were kept on during the process and the company was able to hire additional employees, with the company increasing from 27 employees to 70 within two years. Working on the sell side due diligence, the Momentum team presented the company’s financial past, present, and future. As a result the company connected with a group that invested in improving the balance sheet and allowed the company to focus on additional areas of new business.