H&W Foods Sale

Situation

H&W Foods ("H&W") is a broad line food service distributor, coupled with state-of-the-art value added meat processing capabilities, headquartered in Honolulu, Hawaii. H&W serves grocery retailers and food service operators throughout Hawaii and the Pacific Basin. H&W entered Chapter 11 bankruptcy as the result of financial difficulties that began with construction cost overruns on a new warehouse and meat processing facility.

ZS Role

Zachary Scott was engaged by H&W as the Court appointed Chief Restructuring Officer with responsibility for realizing the highest recovery by the creditors.

Results

Zachary Scott successfully arranged debtor-in-possession financing while thoroughly evaluating the business. The conclusion was that high fixed costs, insufficient production volumes, and a need for additional capital investment made financial restructuring impractical. ZS marketed H&W’s assets and business to strategic buyers in Hawaii and the mainland. H&W’s creditors received the highest possible value as a result of the competitive sale process. The successful bidder, Palama Holdings, acquired the business in a cash transaction with the objective of bringing additional production volume to H&W’s plant to improve the operating economics. The business emerged from bankruptcy with a materially stronger balance sheet and a rejuvenated competitive position.

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