Case Studies 

Summit engaged directly with a national lender who was looking to sell its loan facilities associated with a middle market protein logistics and trading company.

Industry:  Agricultural Commodity

Subject: Middle market Texas based, top tier exporter of pork and other proteins into the NAFTA market

Circumstances:  Summit engaged directly with a national lender that expressed a desire to exit its lending relationship, comprised of a series of loans totaling $39 Million, with the company.  A subsidiary of the company had entered into a number of trade finance transactions in prior years that had led to significant cumulative losses, creating an over-leveraged balance sheet. The balance sheet issues were causing challenges with vendors, and the company was carrying aged accounts payable which needed to be addressed as part of the Summit transaction in the form of additional liquidity.

Solution: Prior to acquiring the bank debt, Summit and the sponsor group agreed in principal to the terms of a post-closing balance sheet restructure and additional loan advances to right size the accounts payable.

Outcome:

• The balance sheet restructure was completed post-closing
• The company has refined its business model by focusing on higher margin sales
• The additional loan advances allowed the company to pay down aged accounts payable
• The company has dramatically reduced its foreign currency risk exposure
• The company adjusted its business model and currently takes no principal risk on the product it sells by acting solely as an intermediary taking a margin between the seller and buyer for its logistical and sourcing services
• Summit is working with the company to refinance the ABL facility with more traditional capital at lower interest rates
• Summit continues to work collaboratively with the Company and has maintained a strong working relationship with the sponsors

A lender sought an exit strategy from its construction loan portfolio and approached Summit to purchase the existing debt of a development project.

Industry: Real Estate Development

Subject: A local development company in the process of developing a high-end condominium project in East Greenwich, Rhode Island, an affluent suburb of Providence.

Circumstance: Originally plotted for three buildings totaling 63 units, at the time of Summit’s initial involvement, only the first building with 21 units had been built and was awaiting custom interior finish. At that time, the developer’s lender was seeking an exit strategy from its construction loan portfolio and approached Summit to purchase the existing debt of the development project.

Solution: Summit moved quickly and was able to close the transaction in a little over a month. Thereafter, Summit entered into a new loan relationship with the developer, restructuring certain aspects of the loan and providing a new construction loan that would allow the developer to complete construction of the first building, clubhouse and pool so that the first 21 units could be sold.

Outcome: Unable to sell the individual units through traditional real estate brokers, as the direct result of the worst economic crisis in more than 50 years, Summit engaged an auction company to sell the units and proceeded to sell all 21 units at auction for prices well above then current expectations. The two remaining condo pad sites were held for several years until the economy improved and were then sold to a local developer.

A Midwest regional bank under increased scrutiny by its regulatory body approached Summit for a solution to its capital crisis.

Industry: Banking

Subject: A Midwest regional bank that was seeking a solution to its capital crisis.

Circumstance: This bank was under increased scrutiny by its regulatory body and approached Summit for a solution. Summit’s experienced professionals responded quickly to the client’s needs, evaluating the bank’s entire troubled loan portfolio and providing feedback on which asset classes’ disposition would be most helpful in the bank’s restructuring. Summit then provided pricing on certain requested asset classes on a loan-by-loan basis.

Solution: The bank needed to reduce its overall level of criticized assets, but due to the sensitive nature of its capital position, was unable to hold a public loan sale. After identifying a pool of assets that would quickly provide the liquidity the bank needed, Summit purchased a $20 million pool of 13 relationships that included performing assets, non-performing assets, real estate owned assets and fully charged off credits.

Outcome: As a result of Summit’s experience and ability to provide a capital solution across many of the bank’s asset classes, subsequent to this transaction, the bank asked Summit to review another selection of assets it wanted to dispose of in the following quarter.