DirectBuy

DirectBuy

Summary

Chief Restructuring Officer

Tulsa, OK

DirectBuy was a membership-based buying service, operating over 100 buying clubs in the U.S. and Canada, that offered consumers access to a wide range of home goods, including furniture, appliances, electronics, and home improvement products, at discounted prices.

Carl Marks Advisors (CMA) was engaged to restructure DirectBuy’s balance sheet to ensure continued operations, draft a go-forward business plan, lead negotiations, and facilitate stakeholder communications.

CMA successfully restructured $335 million in high-yield bonds and a $30 million credit facility, converted Senior Notes to equity, and issued PIK toggle-notes. CMA also extended the Revolver’s maturity, reset covenants, developed cash flow and operating models, and secured financing to stabilize the business.

 

Key Challenges
Leveraged Capital Structure
Out-of-Court Restructuring
Low Liquidity

Engagement Highlights

  • Assisted management in drafting the go-forward business plan, an initial restructuring proposal, as well as lead all restructuring negotiations and communications between management, equity holders, the bank group, and the Senior Notes holders and their respective advisors.
  • Successfully restructured $335 million high yield bonds and a $30 million revolving credit facility in an out-of-court restructuring;
  • Senior Notes were converted to equity and new payment-in-kind toggle-notes were issued.
  • The Revolver‘s maturity was extended, and its covenants were reset in-line with the Company’s projected performance.
  • Created and monitored the Company’s 13-week cash flow and built the Company’s comprehensive business operating model.
  • Assisted in securing and negotiating incremental financing to stabilize the business.

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