Case Study: AeroCare

R&M Aviation d/b/a AeroCare Medical Transport System, Inc.

Challenges

• To facilitate a successful financial turnaround and lead it out of Chapter 11 Bankruptcy.
• To develop a clear plan to address its $5.4 million secured debt and $4 million trade debt.
• AeroCare’s lender swept all of the Company’s bank accounts and repossessed certain aircraft utilized by AeroCare leaving the company with no working capital.
• Rally needed to formulate a restructuring strategy to stabilize operations, maintain revenues and regain the trust of vendors, employees, customers and lenders while maintaining existing operations.

Solutions

• The Rally staff recommended the immediate filing of a Chapter 11 Bankruptcy proceeding.
• Rally professionals formulated a budget and obtained court approval for the use of cash collateral in order to sustain existing operations.
• Rally monitored operations on a daily, weekly and monthly basis to ensure that estimates were being met or exceeded, bills were being paid on time and patient requests were being handled in a timely manner.

Results

• By restructuring its debt, eliminating divisions and unproductive employees, Rally was able to negotiate a settlement with the secured creditor.
• Recovery to unsecured creditors exceeded expectations by more than 50%.
• Rally was able to preserve more than 100 AeroCare jobs across the country.
• AeroCare, after emerging from Bankruptcy on March 27, 2013, is now operating successfully with substantially reduced trade debt and without the significant costs associated with the bankruptcy process.
• Rally Capital Services was awarded the Turnaround Management Association’s 2013 National and Regional Turnaround of the Year – Under $50 Million.