CRG Newsletter

Hot topics and trends in corporate restructuring

The Deloitte CRG Newsletter addresses the current state and outlook for the CRG practice, including recent engagements, announcements, case studies, and upcoming events.


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Become a leader of change: Managing through your company's liquidity crisis

Rudy Morando and Sugi Hadiwijaya, both senior managers with Deloitte CRG, give insight into managing a distressed company in a liquidity crisis. Accepting the challenge and becoming a leader for change are important steps towards company rehabilitation. Rudy and Sugi discuss how having the right mindset and tools to address the challenge can be the difference between a successful recovery and a failed business.

New chapter for innovative retailer

After a disappointing holiday season, Brookstone fell into default with their senior lender and was close to default on their second lien bond debt. The specialty retailer was under enormous pressure to resolve their balance sheet challenges immediately. While the company's first lien lender seemed comfortably secured by assets, it was unclear how other creditors would fare if the situation worsened. As a result, the lenders turned up the heat on the company to sell itself very fast, a process that most likely would have reduced recoveries even further. Instead, by working quickly, Deloitte CRG bought time for Brookstone's investment banker to execute on a sale process in a reasonable time frame to a strategic buyer, avoiding a 'fire sale' and yielding a far better outcome for all parties. Not only did the senior lender get paid in full, the second lien bondholder's recovery is significantly higher than originally anticipated, the company and brand will continue intact with few, if any, projected store closures, and the vendors will be largely uncompromised.

Working closely with management, the Deloitte CRG team first put together a credible weekly financial picture that reassured the senior secured lender there was sufficient time to run an expedited sale process. The investment banker, with Deloitte CRG's close support, signed up a stalking horse bidder for a plan of reorganization. Deloitte CRG, along with Brookstone's investment banker and bankruptcy counsel, then assisted Brookstone management through negotiations over a pre-arranged bankruptcy filing and developed a Plan contemplating a stock sale through an auction process that yielded an Enterprise Value of approximately $173 million (17x FY 2013 EBITDA). The successful sale process not only rescued the company, it saved over 3,000 jobs.

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Scott Avila

Principal | Deloitte CRG


William Snyder

Principal | National Leader | Deloitte CRG


Louis E. Robichaux IV

Principal | Deloitte CRG

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