Level Propane Gases, Inc.

Client

Headquartered in Westlake, Ohio, Level Propane Gases, Inc. (the “Company”) was a distributor of propane for consumer and commercial use. Prior to filing bankruptcy, the Company reported $80 million in annual revenue and serviced approximately 60,000 customers.

Challenge

Substantial operating losses and lawsuits by several state attorneys general resulted in the Company being unable to meet its debt service obligations. The operating losses and debt levels resulted in the Company filing bankruptcy in 2002 in Cleveland, Ohio. The unsecured creditors faced challenging facts in this case, with the secured lenders holding valid, perfected liens over substantially all assets of the Company. With the secured creditor being under-secured, the Committee faced a challenge to obtain a return for its constituency. Bridge was engaged as financial advisors to the Official Joint Committee of Unsecured Creditors (the “UCC”).

Solution

Working closely with the UCC and its counsel, Bridge evaluated potential preference payments made by the Company, as well as a wide array of potential causes of action. As part of this evaluation, Bridge analyzed and exposed weaknesses in a third-party valuation report prepared prior to the Company's filing. Ultimately, Bridge’s critique of this third-party valuation provided significant leverage to the UCC during negotiations with the plan proponent (the pre-petition equity holder) and secured creditors during plan negotiations.

Results

Unsecured creditors received a funded trust to pursue litigation concerning avoidance actions and other causes of action related to former officers and directors of the Company.