Wind Down Management for a $2B Fintech Bankruptcy in Atlanta

This case study highlights Resolute’s role as the Wind Down Officer for an Atlanta-based fintech company.

Background

An Atlanta-based fintech company encountered significant challenges following the sale of its high-performing assets to a major financial institution in 2020. The company faced heightened federal scrutiny and cash flow issues related to its involvement in the COVID-19 PPP loan process. In 2022, the entity managing the remaining assets filed for bankruptcy. Following the bankruptcy plan’s confirmation, a well-known business advisory firm, Resolute, was appointed as the Wind-Down Officer to manage the process and oversee the resolution of the company’s remaining affairs.

The Challenge

As Wind-Down Officer, Resolute was tasked with managing a complex $2 billion portfolio through bankruptcy proceedings. The firm’s objective was to navigate a challenging landscape, efficiently processing creditor claims, addressing potential fraudulent actions, and ensuring the administrative closure of the entity. All of this was done while adhering to strict bankruptcy regulations and maximizing creditor recoveries.

Strategy Implemented

Resolute employed a multi-faceted approach to meet these challenges:

1. Portfolio Oversight: Managed the company’s entire portfolio, monitoring, transferring, and selling loan profiles for the estate’s benefit.
2. Claims Validation: Verified, disputed, and settled creditor claims to reduce the estate’s claims pool and maximize creditor recoveries.
3. Legal Coordination: Launched an RFP process to hire a legal firm specializing in pursuing damage claims on behalf of the estate.
4. Operational Management: Executed essential administrative tasks to ensure the smooth wind-down of the company’s corporate operations.
5. Financial Administration: Assisted with accounting and reporting to ensure transparency and accountability throughout the wind-down process.
6. Asset Disposition: Orchestrated the strategic sale and transition of assets, including loan portfolios, to preserve and recover value for the estate.

Interim Results

Resolute’s ongoing efforts have already produced significant interim results, including:

• Recovered an additional $20 million to date, showing positive momentum towards achieving and potentially surpassing the estate’s financial recovery goals.
• Facilitated the sale of a $7 million charged-off loan portfolio, boosting the estate’s assets.
• Transitioned a $10 million active loan portfolio to a new servicer, ensuring operational continuity for borrowers and financial returns for the estate.
• Reduced the estate’s claims pool by $1 billion by settling and objecting to creditor claims.

Next Steps

Resolute continues to focus on completing the wind-down process, pursuing further asset sales, pursuing causes of action, and ensuring the successful operational closure of the company. The advisory firm is dedicated to maximizing creditor recoveries and finalizing all remaining aspects of the bankruptcy proceedings.

Conclusion

Resolute’s management of this Atlanta-based fintech’s wind-down process demonstrates its expertise in complex financial and operational restructuring. Through its strategic approach, Resolute has achieved substantial financial recoveries and continues to drive the process toward a successful conclusion. This case further solidifies Resolute’s reputation as a trusted partner for companies undergoing critical transitions.