Dana was an $8 billion automotive parts supplier which filed bankruptcy in March of 2006. Centerbridge Partners (Centerbridge) was named the stalking horse bidder to sponsor a Plan of Reorganization (POR) and underwrite a preferred stock opffering. Zolfo Cooper was retained by Centerbridge in June 2007 to perform due diligence as part of their acquisition.
The scope of our project included:
- Reviewing management’s financial projections, business plan and strategic initiatives.
- Meeting with management and their advisors to evaluate the risks and opportunities of the business plan.
- Evaluating the strength of the senior management team and other key personnel.
- Analyzing the risk to the revenue forecast related to awarded vs. targeted business as well as the piece price levels assumed.
- Sensitizing the financial projection to evaluate downside scenarios and risks and opportunities not already included.
- Analyzing liquidity and working capital and understand the managing of cash between the US and foreign subsidiaries.
The specific results and findings of our work are confidential. However, we can disclose that:
- Zolfo Cooper identified several material issues which were addressed as part of the final deal negotiation.
- In addition, Zolfo Cooper developed a risks and opportunities report for the post-emergence board of directors.
- Centerbridge sponsored the POR and took control of the company upon emergence.