Case Studies

Protecting Legacy Business Operations and Driving Value through Restructuring and Debt Re-Financing

Cash & Liquidity Optimization/Restructuring/Chapter 11/Operational M&A

The Awrey family moved to Detroit from Ontario in 1910. In an effort to support her family, Elizabeth Awrey began to sell bread, cookies, cakes and pies, all baked in her home’s coal-fired oven. Mrs. Awrey’s creations became so popular that the family opened a national commercial baking business in Livonia, MI that grew steadily for over 90 years.

In 2004, Awrey’s sales declined however, from $78 million to $71 million over the preceding three years. The declining sales volume, combined with rising ingredient costs, rising health care costs and increased competition, led to a crisis at this family-owned business. In late 2004, Awrey’s engaged Mackinac Partners to provide operational, financial and strategic advice amidst continued market deterioration.

In early 2005, while the restructuring was barely under way, the Company defaulted on certain loan covenants. As a result, its secured lender ceased all further funding. The Company had no alternate sources of capital and filed for protection under chapter 11 of the bankruptcy code. The Company obtained use of cash collateral and with the assistance of Mackinac, continued the necessary task of reducing costs throughout the Company.

Mackinac Partners remained the Company’s lead restructuring advisor throughout the Chapter 11 proceeding. Mackinac Partners actively managed the cash flows of the business and other key operational areas. Mackinac Partners and the Company’s counsel collectively determined that a sale of the Company was the best restructuring alternative. The debtor employed investment bankers to promote and sell the Company.

During the first five months in bankruptcy, the Debtor’s operations became profitable and generated sufficient cash from operations to meet its post-petition obligations (including bankruptcy costs) and avoid additional funding from a DIP financing facility. While operations became more efficient and new customers were obtained, the investment bankers continued to market the Company.


The company attracted the interest of numerous potential buyers and received eleven written Letters of Intent. Mackinac Partners was instrumental in preparing the offering memorandum, managing due diligence and negotiating with potential buyers. After intense negotiations and rigorous due diligence, Hilco Equity Management LLC acquired the Company for $25 million, an amount 70% higher than any initial letter of intent.

Secured creditors including banks, employees and all other priority claims were paid in full. Unsecured creditors received approximately a 70% distribution. After negotiating a successful contract with the union, Hilco retained all union employees. Under its new ownership and capital structure, Awrey’s Bakery continued to thrive.


Awrey’s Bakery has grown from a local Detroit tradition to an American staple found in hotels, restaurants, and select international establishments. The company staved off another possible closing when it was bought in 2013 by Minnie Marie Bakers Inc. They still produce long sought after breads and treats, including classic desserts, snacks as well as products for the modern pallet, such as newer Gluten-Free products.

If you are in the metro Detroit area, it is well worth stopping in to visit the rich history of this century “wise” bakery, or visit them online at: