If Patrick Walsh can find the right turnaround magic to sprinkle on insolvent Springer Aerospace, he'll collect a $75,000 bonus on top of the $25,000-a-month-plus-expenses paycheque he signed up for last week.
The Manhattan-based consultant will be supervising day-to-day operations at the Echo Bay firm, as he deems it "necessary or advisable."
In business since 1972, Springer is an aircraft maintenance, modification and overhaul shop, located 15 kilometres east of Sault Ste. Marie,
The cash-strapped, privately-held company announced it was seeking creditor protection under the Companies' Creditors Arrangement Act (CCAA) on Nov. 24. The company is about to go on the selling block.
Walsh's appointment as Springer's chief restructuring officer was approved Friday by Judge Michael A. Penny of Ontario's Superior Court of Justice.
"The chief restructuring officer role is proposed and supported by Springer’s current senior management and the [court-appointed insolvency monitor], among others," the judge said. "There has been significant senior management turnover in the past. There is currently no chief financial officer."
"[Christopher Grant], who only recently became the CEO, needs to focus on areas of his expertise – which is essentially ensuring there is an appropriate amount of working coming in the door and managing that work to successful completion."
"A chief restructuring officer is required to lead the restructuring efforts from an operational point of view."
The judge commented further that Walsh's role won't duplicate the work of Springer's existing management.
Also on Friday, Justice Penny ordered that Springer's protection from creditors under CCAA will be extended until March 31, 2023.
As SooToday reported on Friday, Walsh will address Springer's 100 employees at a face-to-face town hall meeting on Tuesday. In addition to his supervisory duties, Grant's engagement letter from Springer calls on him to:
- assist the company in the preservation of its assets
- work with management and the board of the company to establish a plan or plans for the restructuring of the company in coordination with the monitor and report to the company, the monitor and key stakeholders on its progress, timeframe and key issues
- oversee the implementation of the restructuring plan or plans and coordinate and participate in communications to the company, creditors and other key stakeholders
- supervise and monitor the receipts and disbursements consistent with the cash flows filed in the CCAA proceedings and arising out of the operations of the company and bring all related issues to the attention of the company and the monitor
- assist the company and monitor the development and implementation of a sale and investment solicitation process
- report to the company, the monitor, and key stakeholders regarding the business and affairs of the company as the chief restructuring officer in its reasonable discretion deems appropriate
Court documents reveal that Springer had no lawyer, chief financial officer or directors' and officers' liability insurance when it flew into this year's cash-flow turbulence.
Springer initially relied on the services of lawyers for its largest creditor, Caisse Desjardins Ontario Credit Union Inc. Since then, Springer has retained its own legal counsel.
Desjardins is now saying it's lost confidence in the ability of Springer's current management to run the company.
The judge has made it clear he wants the aerospace company held together as a going concern.