Case Study
FTI Technology Delivers Transformed Contract Portfolio Following Large Pharmaceutical Company Bankruptcy
In a large bankruptcy matter, FTI Technology’s Contract Solutions experts identified and quantified risk and opportunities across a company’s contract population, to support recovery efforts by a group of lenders acquiring the emerging entity.
Situation
FTI Consulting was engaged as transactional advisors during the Chapter 11 proceedings of a large pharmaceutical company, supporting a group of ad hoc lenders. The lenders aimed to maintain the company’s operations and maximize the value of the company as it emerged from bankruptcy. As part of a broader client matter, FTI Technology’s Contract Solutions team was engaged to help the lender group understand which agreements were critical to the company’s operations and develop a strategy to retain maximum value.
Our Role
Working closely with the company's bankruptcy advisors and other involved segments across FTI Consulting, FTI Technology’s Contract Solutions team collected, organized and analyzed nearly 9,000 customer and supplier contract documents, along with historical finance data (e.g., spend and revenue).
The team documented the company’s contract footprint and scope of its operations, identifying gaps in contractual coverage (e.g., expired, expiring or missing contracts), redundancy (e.g., multiple suppliers for the same product), inactive relationships (e.g., no spend data), and risk presented by contract terms.
Consultants from FTI Consulting’s Health Solutions practice leveraged their industry knowledge to review 2,200 contracts that were flagged for further analysis. For example, contracts with committed volume were evaluated for possible favorability, if they covered an active, scarce pharmaceutical ingredient, or adverseness, if the material was facing downward pricing in the market.
Ultimately, the information extracted and analyzed by FTI Consulting’s experts enabled the lender group to make informed decisions about how to action and prioritize each customer and supply agreement.
Our Impact
FTI Consulting provided domain expert-led market analysis of key commercial terms, enabling strategic and operational business decisions.
Delivered a refined inventory of critical customer and supplier agreements necessary to maintain or improve the company’s operations.
Created a framework for the client to prioritize and plan for critical supplier and customer agreements.