Strategic Bankruptcy Sale Capitalizing on Market Share and Brand Equity


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Business:

Chellino Crane, Inc. (“Chellino”), was founded in 1995 and is based in Joliet, Illinois.  The company, a leading provider of crane rental and heavy lift services to the oil and gas, industrial, and construction end-markets, filed for Chapter 11 protection of the U.S. Bankruptcy Code in May 2017.


Transaction:

After a nearly $35 million modernization of Chellino’s rental fleet in 2015, the Company experienced unexpected delays in the ramp up of new contract revenue, resulting in tightening liquidity.


Challenges:

The company’s 16 lenders were secured by discrete and separate collateral pools, amongst its fleet, real property, and working capital assets.  Several lenders indicated a desire to market their collateral independently outside the auction process, which would damage enterprise value as a “going-concern” and diminish aggregate recoveries for the Estate.  Additionally, during the course of the bankruptcy process, the Company lost its largest customer, accounting for 30% of 2016 revenue.


Solution:

FocalPoint was engaged to market substantially all assets of the Company under §363 of the Bankruptcy Code.  Despite the loss of the Company’s largest customer, FocalPoint capitalized on the Company’s significant market share in the Midwest, brand equity, proximity to some of the nation’s largest petrochemical plants, as well as quality, new fleet assets to preserve interest in the auction.  FocalPoint engaged more than 80 financial as well as domestic and international strategic buyers and conducted a “mini-auction” for the Stalking Horse.  After selecting the highest Stalking Horse Bid, FocalPoint convinced many of the Company’s lenders to participate in the auction by developing a compelling scenario for potential overbids capturing additional going concern value.  Ultimately, the competitive Stalking Horse negotiations and auction led to an increase in total proceeds of approximately 33% from the initial proposal received by the Estate.

Chellino Crane has sold operating assets to affiliates of M - L Holdings Company Crane Group

FocalPoint served as exclusive financial advisor to Chellino Crane, Inc.

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“Facing a lot of lender opposition to the sales process generally, FocalPoint quickly canvassed the market in connection with the sale of Chellino’s assets and ultimately closed with a well-capitalized strategic buyer, notwithstanding difficult industry trends.”

Michael Fixler, Managing Director
Head of Special Situations Practice
FocalPoint Partners, LLC