Consulting Services

BEST Solutions: Business empowerment and strategic turnaround

Debt Elimination

RISE Solutions: Commercial debt settlement & restructuring

Arkansas Stave & Lumber (ASL)

Case Study | May 21, 2020

Arkansas Stave is a mill that produces staves, used in the production of wine and whiskey barrels. The business did 5 Million in gross revenue.  The business ran into financial issues due to a protracted rainy season which shut off the supply of logs to the mill.  The company didn’t have enough cash to stock up on inventory ahead of the poor logging conditions. They were break even if the mill could run 4 days a week.  The went down to two to three day work weeks.  As a result their debt service and operational costs sank the company.

Arkansas Stave is a mill that produces staves, used in the production of wine and whiskey barrels. The business did 5 Million in gross revenue.  The business ran into financial issues due to a protracted rainy season which shut off the supply of logs to the mill.  The company didn’t have enough cash to stock up on inventory ahead of the poor logging conditions. They were break even if the mill could run 4 days a week.  The went down to two to three day work weeks.  As a result their debt service and operational costs sank the company.

After engaging with SWC an appraisal of all the assets was ordered.  SWC enrolled FBotL in the SWC process. SWC handled all communications with all interested parties.

The assets appraised for $1.5mm.  SWC enrolled SBotL in the A9 sale process and allowing SWC to identify a buyer for the assets.  Clients provided a list of parties they thought would be interested in purchasing the mill. SWC did cold calls with the interested parties and eventually identified a willing and able buyer.

DEBT SCHEDULE AT TIME OF ENGAGEMENT WITH SWC

  • 5 Million in SBA back debt with First Bank of the Lake (FBotL)
  • FBotL lien on all business assets (1st Pos)
  • FBotL lien on Three residential properties (1st Pos)

Through substantial negotiation, on-site visits, and relationship building. SWC was able to secure a sale of the stave mill to Seguin Moreau, a publicly-traded wine manufacturing company.

SWC also negotiated with several vendors, creditors, and financing companies. This included several key saws and equipment to keep the mill running.

The sale included partial repayment to the SBA and an employment agreement, which secures Gene and Grant a six-figure salary.  The process resulted in a number of deals that were agreed upon that enabled the bank to recover a portion of their loss and our clients to a viable exit.

RESULT:

Asset Sale Agreement via A9
800k to Bank of the Lake

Capital lease settlements
2 side capital lease settlements for 70k

Client NDA agreement
$ 275k to both clients at closing

Client employment agreement
$150k for one year to both clients

Client bonus contract
$500k Bonus potential to both clients earned in 6 months, paid over 12.

Total deal size $2.8mm

The clients had the resources needed to release the liens on their property, pay their personal guarantees, and remain employed.

Un-realized Result:
PG release $100k for each client
Property release $450k for each client
Earned funds $300k for each client.

Start an Alliance

Find out how a no-cost strategic alliance can add value to your model.

  • Start an Alliance

    Find out how a no-cost strategic alliance can add value to your model.

    • Your information is confidential and will not be shared with outside parties, see our Privacy Policy. By submitting this form you agree to our Terms of Service.

    Sending Message...

    Message Sent

    A representative will be in touch
    with you shortly.