- TM Capital acted as a financial advisor to the preferred equity holders of Smurfit-Stone Container Corporation in their successful legal challenge to the Company’s Plan of Reorganization (POR) to exit bankruptcy protection. The proposed POR would have provided no return to the preferred holders
- The preferred holders hired TM Capital to act as financial advisor, provide a valuation regarding Smurfit-Stone and review the expert reports filed on behalf of the Company and its unsecured creditors
- TM Capital reviewed the Company’s detailed financial projections along with extensive Company financial and operating data and concluded that the POR substantially undervalued the Company
- The POR valuation relied primarily on projected data developed during the 2009 and 2010 recession. By contrast, TM Capital developed a valuation that utilized longer term “normalized” or “across-the-cycle” financial performance
- TM Capital also highlighted areas where the Company’s five year financial forecast diverged from historical trends. These included long term relationships between containerboard and corrugated box pricing and fixed cost growth. We also noted that the Company’s projections provided no financial return on a significant level of capital expenditures
- Smurfit-Stone and the shareholders agreed to a settlement allocating the shareholders 4.5% of the reorganized Company’s common shares. The settlement announcement led to a significant appreciation in the value of the preferred shares
Industrials
|
Corporate Finance Advisory,
Restructurings
