Michael J. McCauley

Managing Director
Years with Phoenix: 4
Years of Turnaround Experience: 9
Office Location: Philadelphia, PA

Michael J. McCauley joined Phoenix Management Services, Inc. as a Director in November 2006, and is a seasoned financial executive with more than 15 years of demonstrated achievement in a broad array of complex transactions and challenging workout situations. He is a skilled negotiator who is quick to assess a situation, develop practical strategic alternatives, build consensus, and implement an effective action plan to preserve and enhance value. Mr. McCauley’s diversified experience includes turnaround management and operational assessment engagements as well as capital raising and merger and acquisition mandates. Mr. McCauley serves as President of Phoenix’s wholly owned subsidiary, PM Securities, LLC, a licensed broker dealer regulated by FINRA.

Mr. McCauley has worked with manufacturing, distribution, retail, franchising, and service clients in both the public and private sectors and in a wide spectrum of industries in the U.S. and Canada. Professional areas of expertise include business and financial assessments; capital structuring and financing, financial forecasting and cash flow modeling; complex negotiations; dispute resolution; asset valuation and maximizing value through sales of businesses and assets.

During his career, Mr. McCauley has managed due diligence, structured, and negotiated new financing transactions for acquisitions, expansions and turnaround situations with total loan commitments in excess of $250 million. He has managed various portfolios of diversified direct and syndicated loans and leases including senior secured revolving loans, senior term loans secured by M&E and real estate, subordinated mezzanine loans, equipment leases, and factoring and floorplanning facilities. He also managed portfolios of various public and private equity investments including warrants, preferred stock and common stock.

Mr. McCauley has structured and negotiated more than a hundred loan modifications, forbearance agreements, financial restructurings, recapitalizations, and legal settlements both in and out of court. He also managed the sale and divestiture of various companies, the sale of specific assets, and liquidations under Chapter 11 and Chapter 7 bankruptcies. Overall, Mr. McCauley has worked with more than 150 middle market companies with an aggregate loan and equity value of more than $1.0 billion.

Phoenix Management Services Experience

• Turnaround Management
• Crisis Management
• Interim Management
• Operational Assessments
• Financial Forecasting
• Cash Management

• Strategic Advisory
• Bankruptcy Advisory
• Liquidation and Business Wind Down
• Due Diligence Reviews
• Litigation Support

Selected Advisory Assignments

Performed an operational assessment and prepared both a monthly financial forecast and weekly cash flow forecast for an $80 million manufacturer of corrugated steel and plastic drainage pipes sold into various construction markets, including commercial real estate, residential housing, and municipal highway project markets. Assisted company with developing cost saving initiatives, obtaining a waiver and amendment from its diversified bank group, and re-setting financial covenants to achievable levels based on recent financial performance.

Performed an operational assessment of a precious metal refinery with over $1 billon of volume processed annually and $15 million of annual net revenue. Provided strategic and financial advisory services to the company in negotiating extensions of its $35 million credit facility and evaluating various growth financing and strategic options.

Served in an interim management role for a $20 million tire and gasoline retailer with 5 locations that was in the process of opening a new store location and fighting various legal issues, including a trade name dispute and a class action lawsuit for misleading advertising against the company. During the 11 months in this position, Mr. McCauley negotiated and completed the real estate lease and new equipment capital leases for the new store opening, negotiated a trade name licensing agreement to resolve the ongoing licensing controversy, and initiated a successful settlement regarding the class action lawsuit.

Served on the Official Unsecured Creditors Committee of a $400 million regional airline that filed for Chapter 11 bankruptcy protection. Participated in discussions and meetings regarding efforts to sell the company, the closure of the airline, the approval of retention plans for key employees and the process of orderly liquidation in order to maximize recovery for creditors.

Negotiated and managed a peaceful repossession of assets of a $12 million windshield distributor, which provided for a cooperative and effective wind down of the business outside of bankruptcy and relieved the personal guarantor of liability. Maximized recovery by selling inventory in bulk under the Uniform Commercial Code to a strategic buyer and by developing and implementing a rigid accounts receivable collection process. The senior lender received a full payoff representing a recovery 158% higher than anticipated.

Obtained an exparté seizure order from the Supreme Court of the State of New York to take possession of jewelry inventory on behalf of the secured lender. Upon arrival at the jewelers with the New York City Sheriff, Mr. McCauley negotiated a settlement agreement with the guarantor to allow for a peaceful private auction sale under the Uniform Commercial Code. The auction bidding process resulted in a recovery 161% higher than anticipated.

Industry Experience

• Airline
• Apparel and Retail
• Computers and Electronics
• Consumer Products
• Casino and Gaming
• Financial Services and Leasing
• Healthcare and Assisted Living
• Hotel and Time Share Resort

• Information Technology and Software
• Jewelry and Precious Metals
• Printing and Publishing
• Restaurants, Food and Beverage
• Steel and Aluminum Mills/Foundries
• Telecommunications
• Transportation and Logistics

Phoenix Capital Resources Experience

• Capital Raising and Refinancing
• Expansion/Growth Financing
• Mergers, Acquisitions and Divestitures

• Recapitalization and Balance Sheet Restructurings
• Out-of-court Bankruptcy Auctions

Selected Capital Advisory Experience

Successfully sold a $6 million manufacturer of hot-forged scissors and shears in order to create liquidity for its parent. Identified a strategic acquirer willing to make a “pre-emptive” offer for the company. After months of due diligence and negotiations relating to environmental issues and indemnification, the Company was sold for 7.5x EBITDA and nearly 1.0x revenue.

As a new member of the Board of Directors of a $10 million electronics distributor with break-even cash flow, Mr. McCauley conducted due diligence, reviewed financial performance and forecasts, and assisted with evaluating and negotiating offers to purchase the company to determine the strategic value of the company. He assisted the Board in developing management incentive compensation changes to facilitate improved financial performance and a sale. A strategic buyer was identified to purchase substantially all of the assets with a valuation markedly higher than prior offers.

As an interim manager, Mr. McCauley prepared due diligence materials for potential purchasers of a $20 million tire and gasoline retail operation and identified five parties interested in making bids, including both financial and strategic bidders. All five parties made bids and the company was sold to the highest bidderresulting in a significant return on investment.

Financial advisor for secured lender to a 70 location casual steak dining chain with $140 million of revenue. Evaluated the company’s viability under the plan and the expected recovery values for its senior lender. Guided lender’s decisions to support a Chapter 11 reorganization plan restructuring its $30 million loan and subsequent settlement of the debt at a discount through a combination of restaurant sales and a sale-leaseback transaction of owned restaurant locations in order to avoid a Chapter 22 filing.

Financial advisor for a secured lender to a publicly held, $45 million soy cheese manufacturer. Negotiated a series of waivers, amendments and forbearance agreements between the company and its senior lender over a three-year period to avoid a bankruptcy filing and facilitate a full payout of the lender’s $11 million revolving loan and $4 million mezzanine loan.

Approved, structured, and negotiated a $31 million senior revolving credit and term loan facility to effectuate a management buyout of a $33 million paper shopping bag manufacturer.

Prior Experience

Prior to joining Phoenix Management Services, Inc., Mr. McCauley was a Vice President and Portfolio Manager with FINOVA Capital Corporation. Following FINOVA’s own restructuring efforts in 2000 and bankruptcy reorganization in 2001, Mr. McCauley was retained to assist with the orderly liquidation process of its $7 billion diversified portfolio.. While at FINOVA, he held senior positions in loan underwriting and portfolio management and assisted with the office closures and wind downs of several locations. He held executive-level positions in two operating companies that FINOVA took control of through debt-to-equity conversions. He also served on an Official Committee of Unsecured Creditors in a Chapter 11 liquidation.

Mr. McCauley began his career with CoreStates Bank, N.A. (now Wachovia/Wells Fargo), in Philadelphia PA. He completed the Wholesale Bank Training Program working in middle market and asset based lending, including loan participations with Congress Financial Corporation.

Education/Affiliations

Mr. McCauley earned his Bachelor of Arts from Dickinson College in Carlisle, PA, with a double major in Economics and Policy & Management Studies. He studied for a semester at American University in Washington, D.C. under the Economic Policy Semester Exchange Program.

He is a member of the Association for Corporate Growth, Turnaround Management Association, and the Association of Insolvency and Restructuring Advisors. Mr. McCauley holds his Series 7, Series 24, and Series 63 licenses and he is in the process of completing his application to become a Certified Insolvency and Restructuring Advisor (“CIRA”).