Investment Bank Steps in to Save Company and Founder in Successful Restructuring of Auto Dealerships and Finance Company

DALLAS (May 20, 2010) - Barrier Advisors, a nationally recognized middle-market restructuring, operations improvement and special situations investment banking firm, announces the restructuring of a chain of Southwestern US auto dealerships. Targeting the subprime market, the dealerships were out of financing availability when Barrier was retained to advise the company's founder on the refinancing or sale of the business.

"It is a tough time for auto dealers," said Jeff Jones, managing director of Barrier Advisors. Financing for used cars has nearly dried up, volume is off and competition is intense. "Dealers are critically dependent on financing that, in the case of our client, had been frozen by the primary lender to the dealership's captive finance company during the peak automotive selling season. The company also lost its auto floorplan line, creating a funding crisis. Finally, the overall decline in asset values and the co-mingling of our client's personal and corporate assets, many of which were personally guaranteed made matters even more complicated."

According to Jones, during several months of intense negotiations with creditors, Barrier acted quickly to handle the cash flow issues created by the floorplanning and note discounting financing sources freezing their credit lines, while simultaneously working to restructure the personal obligations of the company's founder. "Barrier advised the company on cash flow management and cost-cutting measures while taking decisive action to preserve the value of the business and reinstate the floorplan and finance company' financing facilities," noted Jones.

"Barrier Advisors' combined skills in restructuring and investment banking resulted in a solution wherein (1) the company's founder received cash and notes for his equity, (2) a private equity fund assumed all the company debt plus some of the founder's personal debt and (3) the founder's personal obligations to other creditors were either settled in kind or extinguished. In addition, Barrier negotiated full releases for the founder from all guarantees and remaining financial claims. Any way you look at it, this was an amazing outcome for our client," he said.

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