SPECIAL SITUATIONS

It is usually less about the business and more about the situation while helping get someone from Point A to Point B. 

These borrowers are typically experts in their niche with credible integrity. Their businesses often involve esoteric assets generally underfinanced in the traditional environment and require structured capital such as quarries, copper mines, watches, trailers, aircraft parts, jet engines, and art.  Other scenarios could include providing liquidity against assets on balance sheet that include oil & gas, commodities, metals, and luxury goods. 

These situational scenarios can be positive event-driven, where a company has secured a unique contractual opportunity beyond the comfort of traditional sources of capital that require structured finance. In many situations, it is a seasoned company performing well but falling out of covenants with their lender where there is a clearly defined path towards a rebound. 

Also actively seeking to attract real estate, operating businesses, and note portfolios experiencing technical dislocations, but uniquely situated within their market experiencing bankruptcy, require balance sheet restructuring. 

In other situations, there might be an opportunity to scale up younger companies by going deep into their supply chain through pre-export, pre-invoice type financing to build a business alongside the sponsors for better scalability and efficiency. Esoteric industries such as telecom, agriculture, and other emerging niche products are desirable.

However, no matter the situation, these must be quantifiable scenarios behind good people and supported by tangible assets or meaningful book value that provide compelling economic upside for the checkwriter. While our ecosystem has the liquidity to pursue various-sized transactions, it is more important that we possess the trust and track record of working within special situations and distress markets for over 15 years. 

We do not seek brokered transactions that have made the proverbial rounds.  Well-trafficked transactions are not our cup of tea.     

Here is what excites us – compelling situations that either nobody else has seen and/or a unique, high-barrier-to-entry position or access to information that is unknown to the general public.

The following represents common scenarios that would be compelling:

· Restructuring a company’s overleveraged balance sheet and exiting it from a bank loan.

· Scaling a company by helping them avoid dilution too early. 

· Recapitalizing and strategically supporting mature companies that lost their top client.

· Purchasing debt from lenders seeking an exit strategy.

· Providing working capital to scale a company by aligning deep into its supply chain.

· Rescue capital for previously healthy companies that cannot cover their burn rate.

· Acquiring intellectual property.

· Working with a regional bank to restructure their loan portfolio or address other internal challenges.

· Working with borrowers who have had their loan terms re-traded and need a quick close elsewhere.

· Municipalities with special projects backed by investment-grade credit.

· Loans using television royalties as collateral via their guaranteed cash flow.

· Businesses that are growing too fast or need help to catch up on previous challenges beyond the comfort level of their current asset-based lender.