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Complex Recapitalization of Family-Owned Business

Case Title: Complex Recapitalization of Family-Owned Business
Practice Area: Corporate, Capital Formation & Securities Law 
Case Desc:

Our client is a multi-generational jewelry and diamond retailer with prominent New York City locations and an expanding online store. One branch of the family, a father winding-down his career and his three adult sons taking a greater role, desired to acquire all of the equity interests in the main jewelry business and an affiliated estate jewelry business from the other branch of the family, the father’s brother and his three adult children. All of the cousins and their fathers actively worked in the business at the outset of the transaction. To complicate matters, our client also desired to acquire an 80% interest in the estate jewelry business from a leading hedge fund complex, which also was the sole secured creditor of the estate jewelry business and desired to have its loan repaid entirely.

The transaction required not only negotiating two side by side securities purchase agreements for different legal entities with different sets of sellers – some of whom had multi-generational ties to the companies, but amending, enlarging and extending the client’s senior credit facility and negotiating new mezzanine debt facilities and related intercreditor and subordination agreements. The client’s senior secured bank lender had been their sole lender for in excess of 25 years and we needed to overcome their hesitancy in allowing junior debt into the capital structure.

In representing the client, Tannenbaum Helpern navigated the complex, and often emotional, relationships among family members, long-term commercial partners and a half-dozen lenders to complete the simultaneous closing of all the financing and stock purchase transactions.
Attorney(s): James Rieger 
Industry: Retail 
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