Level Propane Gases, Inc.

Client

Level Propane Gases, Inc. was an $80 million annual revenue distributor of propane for consumer and commercial use with approximately 60,000 customers.

Challenge

Substantial operating losses and lawsuits by several state’s attorney generals resulted in the Company being unable to meet its debt service requirements. The operating losses and debt levels resulted in a bankruptcy filing. Bridge was engaged as financial advisors to the Official Joint Committee of Unsecured Creditors (the “Committee”). With the lender’s perfected security interest representing less than amount of loans outstanding, the Committee faced a challenge to obtain a return for its constituency. A current Principal with Bridge was the lead member of the firm retained as financial advisors to the Secured Creditors.

Solution

Working closely with the Committee and Committee counsel, Bridge evaluated potential preference payments made by the Company, and potential causes of action. As part of this evaluation, Bridge analyzed and exposed weaknesses in a valuation report prepared by a third party financial firm prior to the Company's filing. Independent of the Bridge work, an investigation by the Bridge Principal then working at another firm into the Company’s books and records exposed a pattern of irregular payments and general ledger manipulation in the years leading up to the bankruptcy filing. Detailed analyses of intercompany transactions were supplied to the Secured Creditors.

Results

The Committee received sufficient cash from the Secured Creditors to fund litigation concerning certain causes of action related to former officers and directors of the Company. The causes of action are ongoing. The Secured Creditors utilized the analysis and report to pursue the prepetition owners and board of directors. These causes of action are also ongoing.