CODA AUTOMOTIVE - CASE STUDY
Industry: Automobile Manufacturers
Transaction Type: Chapter 11 §363 Sale
COMPANY DESCRIPTION
Coda Holdings Inc. designed, semi manufactured, and sold electric vehicles (“EVs”) and lithium-ion battery systems built for automotive and power storage utility applications.
SITUATION OVERVIEW
The Company filed for Chapter 11 bankruptcy protection on May 1, 2013, due to excess leverage, production delays, insufficient capital to market and sell its sedan, and slow growth of the EV market.
EMERALD SOLUTION
In connection with the chapter 11 filing, Emerald was previously retained as the restructuring advisor and CRO of Coda and is currently serving as the Trustee to the Liquidation Trust. As restructuring advisor and CRO, Emerald focused on the following action items:
- Implementing an operational restructuring, which downsized the workforce from 250 employees to 57 and transformed the business from an OEM of EVs to a provider of energy storage.
- Securing a prepetition bridge facility, which provided an aggregate amount of $9.4 million in principal and was subsequently rolled into the post-petition DIP facility.
- Planning for the chapter 11 bankruptcy filing, which included all creditor communication and negotiation, various diligence efforts, 13-week cash flow forecasting, claims analysis, and the filing of the Debtor’s Schedules and Statements.
TRANSACTION RESULTS
As a result of Emerald’s involvement, the following outcomes were successfully achieved:
- The Debtor completed the sale of substantially all of its operations to the Stalking Horse Bidder on June 21, 2013, for approximately $25.0 million.
- The plan, which was confirmed by the bankruptcy court in January 2014, went into effect in March 2014 and established a Trust for the benefit of General Unsecured Creditors, with Emerald serving as Trustee.
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