The Bankruptcy Court for the Central District of California confirmed the Chapter 11 plan of reorganization of Max Equipment Rental, based in San Marcos, Calif. Under the terms of the plan, secured creditors will be paid in full over time with affordable restructured payment terms. The unit holders, Mason Bailey and Robert McDaris, will retain 100-percent ownership and control of the company.
FocalPoint Partners served as financial advisors to the company.
Founded in 2000, Max is an independent rental company serving southern California and northern Mexico and was ranked No. 100 on the 2008 RER 100. Max is strategically positioned close to several military bases in Southern California and is a preferred supplier to general contractors servicing military construction and maintenance contracts.
The company expanded its operations through 2007 but was negatively impacted by the downturn in the southwestern United States. The decline in rental rates also severely impacted the company, which was unable to successfully negotiate an out-of-court restructuring with a large and disparate lender group. Max filed for Chapter 11 bankruptcy protection in December 2009.
FocalPoint worked with the secured creditors to establish a longer term payment plan to reduce burdensome debt service requirements, enabling the company to emerge bankruptcy with improved cash flows. The company has improved its business environment with an increase in rental rates and equipment utilization rates.
“The plan reinstates the secured lenders’ claims but under terms that are much more manageable for the company,” said Dan Conway, managing director of FocalPoint.
“We expect the multi-million dollar military base construction projects in Southern California to provide steady and constant work for Max,” said Bailey. “We are now properly capitalized to take advantage of the rebound in this market.”