C2 Media, Inc.

Client

C2 Media was a substantial print media concern with operations in the United States and Canada. Annual revenue was approximately $80 million.

Challenge

The Company was formed through a leveraged buyout in which the secured lender loaned money to the Company in order to pay the shareholders of several acquired companies. These transactions caused the Company to become over-leveraged and eventually forced it to file bankruptcy. The Unsecured Creditors’ Committee engaged Bridge as its Financial Advisor to assist, inter alia, in determining whether a fraudulent transfer suit against the secured lender had merit.

Solution

Bridge analyzed each acquisition transaction to see if the facts, the accounting and the cash trail would sustain a fraudulent transfer allegation against the secured lender group. In addition, Bridge performed a systematic analysis of C2 Media’s financials and operations to determine whether the Company was insolvent at the time of any or all of the transactions or was rendered insolvent by any or all the transactions. Bridge produced an expert report regarding the Company’s solvency when the transactions took place.

Results

The Committee filed a lawsuit against the secured lenders. The lawsuit, supported by Bridge’s report, resulted in a negotiated settlement with secured lenders and substantially increased the return to unsecured creditors. Bridge was subsequently appointed as trustee for the post-confirmation estate and continues to actively liquidate the remaining assets on behalf of the unsecured creditors.