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Tri Starr Management Services, LLC

DBA: Legacy Supply Chain Services.

LEGACY Supply Chain Services (LEGACY) is a third-party provider of value-added warehousing & distribution, and transportation solutions for businesses with dynamic supply chains in North America. 
Our logistics solutions offering includes warehousing & distribution, e-commerce fulfillment, international & domestic transportation brokerage, customs brokerage, and dedicated fleet. High touch customer service and operational expertise delivers results for clients in retail, cpg, electronics & industrial manufacturing across all sales channels - direct to consumer, direct to store & big box retail environments, distribution center to distribution center, and wholesaler/distributor.

CEO: Mike Glodziak

BDC Credit Reporter View

We know very little about the Company and what went wrong in 2016 to cause its principal lender - THL Credit (TCRD) to take control and restructure the business, taking out one of its more senior lenders along the way. Nor do we know what went right after the change of ownership or what the respective equity stakes were. We mostly know the progression of the TCRD investment, including a big Realized Loss in 2016, a portion of which was recouped two years later when the Company was sold to persons unknown and at a price not given in October 2018. With that repayment, neither TCRD nor any other BDC has exposure to the Company, which does business under another name. 

Highlights

10/26/2018: TCRD Company fully exited its debt and controlling equity investment. Cash proceeds received and escrow were in-line with the September 30, 2018 fair value.

IIIQ 2018: TCRD announces sale of Company occurred in October 2018. The debt and equity was valued at $14.9mn. Since the restructuring TCRD advanced - at different times $6.5mn to the Company, bringing total expoisure to $27mn. Overall, the net loss is ($12.1mn), a $5mn positive variance from the time of the Realized Loss in the IIIQ 2016.

IIIQ 2016: Company debt restructured. TCRD comments on CC:

 "Our debt security was converted into a majority equity stake and we also purchased part of the first lien loan for approximately $3 million as part of a substantial discount to par. We believe the restructured balance sheet should position the company with the necessary liquidity to drive earnings growth going forward. As shareholders, we are working with financial advisory firms to drive change into the cost structure of the business including deemphasizing certain service offerings and other initiatives to [minimize] our recovery to our original sub debt investment".

Also: "So from a performance standpoint, the business is actually performing above expectations. It's just on that non-accrual status there's a couple of small legacy tranches on that original first lien transaction that was led by a commercial bank that's just -- it's not current pay that's what's reflective of the accrual or the non-accrual status, it doesn't, we are not looking at that part as a return from our perspective. We made that investment basically as a way to get the restructuring done, as a way to preserve value, not only in the investment that we made, but also the sub-debt that we've converted to equity as we are now the sole shareholder".

10-Q: "As part of the restructuring, the Company exchanged the cost basis of its subordinated debt totaling $20,558 for a controlled equity position of an affiliate of Tri-Starr Management Services, Inc. valued at $3,136. As result of the restructuring, the Company recognized a $17,422 loss on conversion of its subordinated debt investment to common equity. Additionally, the Company made a $3,135 investment to acquire a first lien senior secured term loan position in the company".

IQ 2016: First discussion of Company on TCRD Conference Call:

We continue to work actively with the company and its capital providers on a path forward, through an expense controlled growth initiatives and repositioning the balance sheet. Our expectation is that a full recovery of principal and interest may not be likely over a long term.

IVQ 2015: Subordinated loan placed on non accrual by TCRD.

IVQ 2014: Added to Watch List due to valuation discount.

IQ 2013: TCRD initiates exposure with $20.6mn subordinated loan, due 2019. Includes Board rights.