Inglewood's Work as Creditor Trustee for Allied Consolidated Industries Ends With All Creditors Paid in Full, Including Interest

Inglewood has concluded a remarkably successful engagement, serving first as financial advisor to Allied Consolidated Industries and then as creditor trustee in a four-year bankruptcy case that ended with every creditor paid in full, including interest. The case began when Allied's major customer was awarded a $10 million judgment lien, forcing the company to file for bankruptcy protection. That customer was represented by one of the top five global law firms.

An Innovative Plan, Confirmed by Cramdown

As financial advisor to the debtor, a role at the core of the firm's Chapter 11 bankruptcy advisory practice, Inglewood developed an innovative plan of reorganization that was approved by cramdown over the major customer's objection. Despite their significant differences, the parties agreed on one thing: Inglewood had the knowledge and ability to be impartial and independent. As a result, Inglewood was appointed creditor trustee as part of the plan of reorganization, the kind of court-tested mandate at the center of the firm's trustee services work.

The Creditor Trustee Mandate: Monetize the Assets

As creditor trustee, Inglewood was charged with monetizing Allied's substantial real estate and personal property assets over an approximately two-year window. The family owners of the reorganized debtor were given the same two-year window to operate the business.

The asset pool was large and varied:

• More than 300 acres of industrial land
• Several buildings, including a 200,000-square-foot state-of-the-art manufacturing building, a 500,000-square-foot former tube mill building, and a 25,000-square-foot office building
• Multiple high-end, specialized CNC machines
• More than 1,500 auction lots of manufacturing equipment, vehicles, tools, numerous free-standing overhead cranes, and multiple large excavators and trailers

Over the course of the case, Inglewood engaged two real estate brokers and three different auctioneers, matching each broker's and auctioneer's strengths to the assets being sold.

Inglewood also worked through the proof-of-claim process, resolving every claim, including one through an evidentiary hearing. The largest proof of claim was ultimately settled at 40% of the originally claimed amount.

A Case That Nearly Went Sideways

The plan of reorganization initially progressed slowly, with mixed but overall favorable results from the early auctions. It was becoming apparent that net funds might be insufficient to pay all of the creditors, and that the reorganized debtor might have to give up certain highly prized litigation rights to satisfy its obligations. Then one of the creditors filed a motion to convert the case to a Chapter 7 liquidation.

A Five-Minute Deal That Paid Everyone in Full

As the final auction was coming to a close, Inglewood entered into an agreement with a third-party investor to buy substantially all of the remaining assets. The transaction, largely structured in the span of five minutes in the middle of the auction, generated enough additional funds to pay every creditor in full, including interest, and allowed the reorganized debtor to preserve its litigation rights.

"I never would have guessed that Inglewood would be able to pull this off, to pay all of the creditors in full."

That assessment came from the very creditor who had filed, and ultimately withdrew, the motion to convert the case to Chapter 7. The major customer and its counsel, who had objected strongly to the plan at the outset, were also highly complimentary of the final results.

Why It Worked

The outcome reflects what Inglewood brings to every distressed engagement: an innovative plan, a highly capable team assigned to work it, and, most importantly, a professional and steady hand through the animosity, objections, hearings, negative expectations, and disagreements that ran from the filing through the plan of reorganization. That steady discipline, the same approach Inglewood applies in its turnaround consulting engagements, moved the case to a resolution few thought possible.