🚜New Chapter 11 Bankruptcy Filing - Worldwide Machinery Group, Inc.🚜
Family-owned rental co. looks to chapter 11 to remain family-owned
On September 11, 2025, Houston-based Worldwide Machinery Group, Inc. and three affiliates (collectively, the “debtors”) crashed into the Southern District of Texas (Judge Lopez). The debtors rent, buy, and sell heavy machinery. You know the stuff:
Since 1949, they’ve been owned by one family. Joe Greenberg founded the biz, and his grandsons, Adam and Evan Greenberg (they’re brothers), own a collective ~82.6% today.
And they’d like to keep it that way, notwithstanding a February ‘24-defaulted ABL facility agented by Key Equipment Financing (“KeyBank”) and ~$72.6mm in other secured debt.
Before we get there though, we’ll turn to CRO and first day declarant Scott Avila (of Paladin Management Group (“Paladin”)) to tell us what went wrong:
“The Debtors’ business was heavily impacted by COVID and a catastrophic decline in the pipeline industry.”
NOPE, that’s all he says. Followed by a general allegation of “… extensive efforts to restructure …,” which presumably involved that ‘22 and ‘23-issued debt ⬆️, and disclosure the debtors generated ~$67 million in revenue last fiscal year.
Anyway. By the late summer and early fall of ‘24, KeyBank started making demands, which brought about the debtors’ (i) appointment of independent directors John Young, Jr. and Robert Warshauer, who compose their restructuring committee, and (ii) hiring of Paladin and Mr. Avila to assist in righting the ship.
They then broke out their pencils and got to work on the optimal path forward.* For that path, let’s hand it back to Mr. Avila:
AKA the restructuring default – not exactly something that takes a half-trip around the sun to arrive at.
Anywho. Piper Sandler & Co. ($PIPR) then joined the crew and kicked off a 202-party-contacting sale process, which boiled down to two formal indications of interest (“IOIs”) in July ‘25. Here’s the low-down on the IOIs:
“One was not competitive.”
Take a wild guess at who submitted the other:
“The other was an IOI from [Diversified Holding, LLC (‘Diversified’)], an entity organized by the majority owners of the Company—the Greenberg family—but funded by [Macquarie Equipment Capital, Inc (‘Macquarie’)].”
Fun. An insider deal. The cash component of which, $52.5mm, is equal to ~44.6% of KeyBank’s senior claims. Assumed trade liabilities make up another $13.1mm.
That ain’t an outcome that KeyBank signed up for. Instead, it wanted to sell its claims to Gordon Brothers Commercial & Industrial, LLC (“Gordon Brothers”) and hit the road.
Here’s where things started pivoting in-court. During the sale process, the debtors also solicited liquidation bids and naturally one of ‘em came from none other than Gordon Brothers.** But to get the debtors’ confi info for that bid, Gordon Brothers had to execute an NDA that prevented it from “‘… enter[ing] into any arrangement with any creditor of [the Debtors] relating to their claims as such a creditor’ without the Debtors’ consent.”
KeyBank repeatedly asked for that consent in connection with future forbearances, but the White & Case LLP-repped debtors’ response was a familiar, market-rep-affirming tune:***
So the KeyBank forbearance expired and after Macquarie’s credit committee approved the Diversified deal, the debtors slammed into chapter 11 … without even giving KeyBank a heads-up … to pursue it.
And we mean slammed. The debtors want to close the sale within thirty days of the petition date, [although a sale motion remains elusive and the mechanism to strip KeyBank’s lien ain’t spelled out.]**** [JDW Note to Self: per the first day, the motion is supposed to be filed by Friday 9/19]
To add salt to the wound, the debtors are funding the cases with KeyBank’s own cash collateral nonconsensually, at least for the initial budget’s four-week period. Their argument? Excluding sale proceeds, the debtors will be $830k to the good when it’s over, improving from $608k to ~$1.4mm in cash.
That’s actually true too. If you exclude every cent of restructuring-related expenses. Very reasonable, Mr. Avila:
Naturally, KeyBank objected, but at the September 15, 2025, 1.25-hour first-day hearing, Judge Lopez wasn’t keen to force a liquidation, observing that “… the budget … appears to be keeping the business running, quite frankly.” He approved cash collateral usage and scheduled a second “first day” hearing for this Friday, September 19, 2025 at 1pm CT for any motions the debtors file between now and then, and another cash collateral hearing for October 9, 2025 at 1pm CT.
The debtors are represented by White & Case LLP (David Turetsky, Samuel Hershey, Charles Koster, Roberto Kampfner, Patrick Wu, Fan He, Kristin Schultz, Gabriela Delgado) as legal counsel, Paladin Management Group (Scott Avila) as financial advisor and CRO, and Piper Sandler & Co. ($PIPR) as investment banker. Robert Warshauer is the debtors’ independent director. KeyBank is represented by Crowell & Moring LLP (Frederick Hyman, Randall Hagen. Caspian Capital L.P., the debtors’ prepetition term loan lender, is represented by Wachtell, Lipton, Rosen & Katz (Joshua Feltman, Benjamin Arfa, Angela Herring) as legal counsel. Diversified is represented by Porter Hedges LLP (Joshua Wolfshohl, Megan Young-John).
*In January ‘25, the Greenbergs – Adam Evan, and their dad Alan – resigned from the board.
**The debtors also received one from Hilco Commercial Industrial and Ritchie Brothers that was competitive with Diversified’s bid. But the debtors’ decided that the Diversified bid provided “slightly better” recoveries, as well as preserving the going concern, assuming trade liabilities, and reducing wind down costs.
***Why KeyBank and Gordon Brothers don’t sidestep the NDA is anyone’s guess. KeyBank ain’t bound by it. Does Gordon Brothers really not have another entity it could use to purchase the debt? A (good) legal team ought to be able to find a way.
****No doubt it’ll rely on Bankruptcy Code section 363(f)(5), which provides that “[t]he trustee may sell property … free and clear of any interest in such property … only if such entity could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of such interest.”
Company Professionals:
Legal: White & Case LLP (David Turetsky, Samuel Hershey, Charles Koster, Roberto Kampfner, Patrick Wu, Fan He, Kristin Schultz, Gabriela Delgado)
Financial Advisor and CRO: Paladin Management Group (Scott Avila)
Investment Banker: Piper Sandler & Co. ($PIPR)
Restructuring Committee: John Young, Jr. and Robert Warshauer
Claims Agent: Stretto (Click here for free docket access)
Other Parties in Interest:
Prepetition ABL Administrative Agent: Key Equipment Finance
Legal: Crowell & Moring LLP (Frederick Hyman, Randall Hagen)
Term Loan Lender and 10% Minority Equity Holder: Caspian Capital L.P.
Legal: Wachtell, Lipton, Rosen & Katz (Joshua Feltman, Benjamin Arfa, Angela Herring)
Proposed Purchaser: Diversified Fleet Holdings, LLC
Legal: Porter Hedges LLP (Joshua Wolfshohl, Megan Young-John)