Strategic counsel role:
When circumstances do not permit a principal’s role for Palisades, it may accept a role as restructuring consultant. One such case is Workflow Management, Inc., a publicly traded $650 million printer and print distributor which defaulted on the leverage covenants of its bank credit agreement in early 2002.
The Special Committee of the Workflow Board of Directors retained Palisades as its strategic adviser. Palisades found the existing ownership interests too adverse and the timing too tight to pursue a role as a principal. Instead, Palisades served as operating counsel to the Board and as an important liaison between the company and its commercial lenders.
Palisades was a key architect of the business plan and management approach under which Workflow concluded one of the few new credit facilities negotiated by a company in “workout” mode during the difficult capital-market conditions of late 2002. The bank group found Palisades’ role so vital that as a condition to waiving Workflow’s default, it required the Special Committee to continue retaining Palisades.
With Palisades continuing to play an important role in guiding company strategy and overseeing week-to-week cash management, Workflow in January 2003 successfully completed a going-private transaction and sale to Parthenon Partners of New York City. Stockholders received $5.25 / share, doubling Workflow’s value prior to the period of Palisades’ involvement.