Case Study:
Centrifuge Manufacturer
Achieved a settlement between company and parent firm to avoid bankruptcy filing
In 2016, 80% of a centrifuge manufacturer was acquired by a Chinese firm with a put option given to the seller for the remaining 20%. In 2018 the put option was exercised and demand was made of the Chinese parent to purchase the remaining 20%. However, the Chinese parent was unable to raise the funds and defaulted on the demand. Litigation ensued and the matter came to ahead in early 2020. As the 80% shareholder, the Chinese parent looked to put the Company into Chapter 11 to resolve the dispute. With the guidance of Harney, the parties ultimately resolved their differences and reached agreement on a restructuring and the purchase of the 20% interest.
The Solution
The Harney team worked with restructuring counsel to evaluate issues that might arise in a Chapter 11 filing and benefits of a Chapter 11 filing
Assessed the business operations and identified significant operational issues with working capital investment
Evaluated the communication of financial information between the U.S. company and the Chinese parent and identified deficiencies
Working with counsel, Harney was integral in negotiating a solution between the 20% shareholder and the Chinese parent
The Results
Gathered information necessary to file a Chapter 11 by the parent identifying strengths and weaknesses of a filing
Identified areas of cost savings in operations and reduction in working capital investments through better operations management
Achieved a settlement between the parties that avoided a bankruptcy filing
Services & Roles
Turnaround and Restructuring
Financial advisor to the Company with the potential to serve as CRO
*Some engagements may have been performed by team prior to joining Harney Partners.
