Three Five Systems

Client

Three-Five Systems was a global provider of end-to-end electronic products to original equipment manufacturers. Headquartered in Phoenix, AZ, the company operated domestic manufacturing facilities in Seattle, WA; Boston, MA and Tempe, AZ, along with foreign manufacturing facilities in Penang, Malaysia; Manila, Philippines; and Beijing, China. The company enjoyed support from the Malaysian government in the form of economic incentives and tax abatements. Among the company’s many product lines were a wide variety of LCD screens, including “rugged-ized” versions for military use.

Challenge

The company was facing persistent operating losses and dwindling liquidity after a series of failed acquisitions and rapidly declining world pricing for the company’s commodity-like products. Late-stage efforts to reverse these trends by moving company’s manufacturing facilities offshore proved insufficient to regain the competitive advantage held by this once robust electronics manufacturer.

Solution

After Bridge completed an extensive operational assessment and strategic alternatives analysis, the Company’s Board decided to install a Bridge professional as CRO to lead the company through a carefully planned, orderly exit form the business. The restructuring plan was designed to maximize the opportunity for creditors to be paid in full as well as provide an opportunity for shareholders to realize a meaningful recovery.

Results

Bridge professionals worked closely with the company’s existing investment bankers to market all of the company’s assets. Certain assets were sold prior to the company filing Chapter 11. All remaining assets were sold through a 363 Sale Process. Three-Five Systems emerged from bankruptcy; a Bridge professional serves as president of the Reorganized Debtor and leads the company’s final wind-down activities. There is great likelihood that when all remaining issues and claims have been resolved shareholders will receive a return.