Stout was engaged by a chain of dental clinics to serve as financial advisor during the companies’ Chapter 11 proceedings. The debtors filed for protection in response to an adverse ruling in a qui tam lawsuit. The debtors believed the lawsuit was meritless but found themselves forced to negotiate a settlement with the plaintiff. The protections of Chapter 11 provided the debtors with time to reach a mediated settlement with minimal disruption to the ongoing business.
Stout provided litigation support and claim estimation, negotiating support during mediation and cash forecasts. Stout secured debtor-in-possession financing for the companies and provided testimony in support of the motion to authorize the loan. Stout prepared statements of financial affairs and schedules of assets and liabilities in support for the bankruptcy petitions. Stout also provided financial reporting services and worked with the debtors to prepare monthly operating reports as required by the U.S. Trustee Program. Stout further provided support, including liquidation analyses, during the development of the plan of reorganization for the debtors. Stout also provided testimony in support of confirmation of the debtors’ plan. The debtors successfully reorganized with all creditors receiving full payment of their claims and the equity holder retaining ownership of the companies.