Velocity Express

Velocity Express Corporation ("Velocity") was one of the largest providers of same-day delivery and distribution/logistics services in the United States. Charlie represented Velocity Express and assisted the company in restructuring senior notes held by 15 different institutions. This facilitated its pursuit of strategic alternatives, including raising $12 million of new financing to refinance its senior secured lender.​​

THE ISSUE

• In mid-2008, in light of the dramatic economic slowdown impacting its business, Velocity found itself in danger of defaulting under its existing indenture agreement. 

• In order to recover from such economic pressure and to pursue strategic alternatives, the company sought to restructure approximately $90 million in senior secured notes.

THE OUTCOME

• Assisted the company in obtaining the required unanimous approvals from holders of senior notes as well as the requisite approvals from various tranches of preferred shareholders to carry out the restructuring.​

• In May 2008, the company completed the restructuring of its senior notes to enhance its near-term liquidity and gain the flexibility required to procure replacement financing for its senior revolver facility.

• Specifically, the terms of the new senior notes provided for:

  • Interest payments to be paid-in-kind (PIK) through 2008, with partial PIK interest through 2009

  • Waiver of the senior noteholders' right of first refusal to replace the senior secured revolving credit facility

  • The definition of terms under which replacement financing would be permitted

• Also helped restructure several new loan facilities with Burdale Capital Finance, an indirect U.S. subsidiary of the Bank of Ireland, for a new $12 million senior secured revolving credit facility. The proceeds were used to pay Wells Fargo Foothill, the lender of Velocity’s existing credit facility, in full.​