On January 13, 2011, the Bankruptcy Court for the Central District of California confirmed the Chapter 11 plan of reorganization (the “Plan”) of Max Equipment Rental, LLC and certain affiliated companies (collectively, “Max” or the “Company”). Under the terms of the Plan, the secured creditors will be paid in full over time with affordable restructured payment terms and the unit holders, Mason Bailey and Robert McDaris, will retain 100% ownership and control of the Company. FocalPoint Partners, LLC (“FocalPoint”) served as financial advisor to the Company. Ron Bender and J.P. Fritz of Levene, Neale, Bender, Yoo and Brill L.L.P. served as legal advisor to the Company.
Founded in 2000, Max is a leading independent equipment rental company serving Southern California and Northern Mexico. The Company is strategically positioned in close proximity to several military bases in Southern California and is a preferred supplier to general contractors servicing military construction and maintenance contracts. The Company successfully expanded its operations through 2007 but was negatively impacted by the downturn in the economy, particularly the construction market in the Southwestern United States. The economic downturn led to substantial pricing pressure as demand for the Company’s services declined. Unable to successfully negotiate an out of court restructuring with a large and disparate lender group, the Company was forced to file for protection under Chapter 11 of the Bankruptcy Code on December 19, 2009.
FocalPoint worked with the secured creditors to establish a longer term payment plan to reduce the burdensome debt service requirements on the Company. As a result, the Company was able to emerge from bankruptcy with improved cash flows amid an improving macroeconomic environment. At the end of 2010 the Company started to experience a turnaround in its business, demonstrated by an increase in rental rates and equipment utilization rates. Mason Bailey, Managing Member of Max, stated, “we expect the multi-billion dollar military base construction projects in Southern California to provide steady and constant work for Max. We are now properly capitalized to take advantage of the rebound in this market. Our customers can continue to count on the highest level of service they have come to expect from Max Equipment.”
Dan Conway, a Managing Director at FocalPoint, added, “The Plan reinstates the secured lenders’ claims but under terms that are much more manageable for the Company. The unit holders retain 100% ownership and the Company is well positioned to take advantage of the growth opportunities ahead.”
About Levene, Neale, Bender, Yoo and Brill L.L.P.
Levene, Neale, Bender, Yoo & Brill L.L.P. is a Los Angeles based law firm that specializes exclusively in matters involving bankruptcy, insolvency, business reorganization, commercial law, out-of-court restructurings and commercial litigation.
About FocalPoint
FocalPoint is an independent investment bank specializing in mergers and acquisitions, private placements (both debt and equity), financial restructurings and distressed transactions. The firm serves middle market clients throughout the United States.
Please contact Dan Conway at 310-405-7010 with any questions about this transaction.