Domestic car manufacturers rely heavily upon parts produced by independent manufacturers. One of the domestic ‘Big 3’ auto manufacturers produces an automobile that operates substantially on an alternative fuel source, and a manufacturer of critical components for the vehicle is located in the Midwest. The increase in sales of domestic automobiles, generally during the preceding year or two, has resulted in an expansion of manufacturing capacity and a need for loans to finance expansion.
One of these manufacturers turned to one of Chuhak & Tecson’s banking clients to secure a loan to finance the acquisition of a similarly situated manufacturer and for an expansion of an existing operating line of credit. The transaction also included a mezzanine lender based on the East Coast, an amended and restated lending arrangement, an inter-creditor agreement and an access and security agreement with the Big 3 auto manufacturer. The new manufacturing facilities being acquired were situated in multiple locations. The agreements with the auto manufacturer had to be coordinated with the client and the mezzanine lender, and collateral was located in multiple states. The transaction was further complicated by the need to pay off approximately two dozen secured creditors of the selling entity. Many attorneys were involved representing the various parties with conflicting interests.
In spite of last minute issues and problems which arose threatening the funding and ultimate closing, through effective and prudent counseling, solutions were quickly formulated by the Chuhak & Tecson team, the loan was funded and the transaction was closed in a timely manner to the satisfaction of one and all. Ten million dollars came in and $10,000,000.00 went out, all in a prompt and orderly manner.
The legal acumen, determination and creative problem solving of the Chuhak & Tecson team of attorneys enabled our client to achieve its goals, while helping make the environment a little greener in the process.