Another Success from Distress - a CCAA that ended with the lender paid in full and a successful relaunch of a business; why banks only discount debt after a real process; the merchant cash advance death spiral; and beating the investor’s brokerage account.
This Week
• “Another Success From Distress” — Sirona Pharma exits its CCAA: licence problems resolved, business sold as a going concern
• Sapphire Global’s DIP — a lender with no prior connection to the file — repaid in full
• Services and capital are merging — how we manage acting on both sides
Lesson Learned: Discounts Are Earned, Not Asked For
• Tariff-hit automotive/aerospace client — revenue down 80%, loan called, a forbearance agreement bought time
• A SISP with a credible third party proved market value — then our financing arm bought the bank’s debt at a discount
• Banks don’t discount because you ask — you have to give them the ammunition for credit approval
Struggles: The Merchant Cash Advance Death Spiral
• A $25K payroll problem → an online portal → a $15,000 advance that costs $5,850 in four months — over 100% annualized
• Stack a few and your cost of capital passes 100% — no business survives that
• Sometimes the only way out is a stop payment on the debits — and taking the fight
What I’m Thinking About: Beating the Brokerage Account
• The S&P 500 paid about 23% a year for the last three years — liquid, diversified, and it never calls with a problem
• Your deal has to survive that comparison — after tax on the withdrawal, fees, risk, and illiquidity
• What wins: real security over real assets, with comparable returns
