Traxi LLC is a national, special situation advisory firm based in metropolitan New York. Our client base includes Fortune 500 organizations, institutional lenders and SME businesses that are often family owned.
Founded in 2000, Traxi is led by Anthony J. Pacchia and Robert J. Iommazzo, seasoned business advisors with over 80 years of combined experience. Our professionals come from diverse backgrounds including restructuring, corporate finance, banking, public accounting, communications and legal services.
We provide value-enhancing solutions in:
Candidates for Subchapter V
A Subchapter V plan can reduce debt and shed burdensome leases and unprofitable contracts.
To be a good candidate for Subchapter V relief, a business needs to be able to generate sufficient revenue to cover operating expenses and debt service on secured debt, after any reduction of the secured debt to the actual value of the collateral.
Any type of business with less than $7.5 million in total liquidated debt is a likely candidate for Subchapter V relief.
The Role of the Financial Advisor in Subchapter V
There are several important and recurring roles for financial professionals in Subchapter V business cases:
- Developing and implementing the debtor’s 3-5 year operating projections that will govern the payments to which creditors are entitled under a plan and liquidation analysis required to be included in the plan;
- Opining on the reasonableness of the compensation contemplated to be paid to the owners or other insiders during the life of the debtor’s plan;
- Valuing a secured party’s collateral for the purpose of bifurcating the claim into the secured and unsecured portions; and
- Assisting the debtor with financial reporting to the court.
Traxi’s program for efficiently handling Subchapter V cases involves partnering with the client’s legal counsel and providing the client with integrated professional services to achieve the optimum result.
Benefits of the New Subchapter V
In February, 2020, a new form of Chapter 11 bankruptcy became available to qualifying small businesses, called Subchapter V, which streamlines the Chapter 11 process in many ways, making it affordable and effective for the first time for smaller businesses.
Subchapter V was originally limited to businesses with no more than $2.7 million in debt, but the CARES Act has greatly expanded that debt limit to $7.5 million, for at least the next year. This will capture a large number of more substantial businesses impacted by the COVID19 pandemic.
Subchapter V provides numerous benefits to small business debtors that are intended to make the bankruptcy process and successful exit from Chapter 11 easier and far less expensive than a traditional Chapter 11 reorganization.
These benefits include, among others:
- The replacement of the expensive and partisan Creditors’ Committee with a neutral “Subchapter V Trustee”, to oversee and facilitate the process;
- A process designed to encourage (and even require) negotiation between the debtor and its creditor constituents (overseen by the Subchapter V trustee) with a goal towards a consensual reorganization plan;
- Permitting only the debtor to file a reorganization plan throughout the case;
- A shortened, 90-day deadline to file a plan of reorganization (which may be extended in some cases), elimination of the disclosure statement requirement, and use of form plans of reorganization to minimize the legal fees associated with the bankruptcy process;
Benefits of the New Subchapter V
Subchapter V provides numerous benefits to small business debtors that are intended to make the bankruptcy process and successful exit from Chapter 11 easier and far less expensive than a traditional Chapter 11 reorganization. These benefits include, among others (CONT’):
- Plan confirmation rules that focus on what the debtor can afford to pay to unsecured creditors going forward and permit a debtor to confirm a plan over creditor objection by proposing to use the debtor’s projected monthly disposable income for a commitment period of 3 to 5 years to repay prepetition unsecured debt;
- The ability to restructure secured debt on fair terms without the support of at least one class of creditors (including, for example, extension of maturity date, elimination of onerous loan covenants, modification of monthly payment amount, elimination of certain prepayment penalties, elimination of default interest, and reduction of interest rates to current market rates in appropriate circumstances);
- Permitting modification of residential mortgages given by business owners to secure loans extended to the company; • Elimination of quarterly fees payable to the United States Trustee;
- Permitting existing owners to retain their equity interests in the debtor without getting acceptance from unsecured creditors or making a substantial contribution towards the reorganization to repurchase the equity; and
- Retained ability to reduce secured debt to the value of collateral, reject unfavorable contracts and leases, and sell non producing or unprofitable assets and business lines free and clear of liens.
The increase in the debt limit for qualified Subchapter V debtors to $7.5 million will sunset automatically on March 27, 2021, unless extended by Congress. Smaller businesses that are in financial distress are encouraged to act now to see if a Subchapter V bankruptcy will assist their recovery from the present crisis and other financial challenges. We believe this represents a transformative improvement of the Chapter 11 process that will be highly effective for a wide range of businesses that are burdened with unmanageable debts but are otherwise viable.
Traxi’s team members have many years of experience guiding organizations of all sizes through the bankruptcy process and are uniquely qualified to assist small organizations take advantage of Subchapter V. We provide flexible fee arrangements that enable clients to quantify costs with a higher level of certainty.
Anthony J. Pacchia
Founder & CEO
Anthony Pacchia (Tony) is Traxi’s CEO and Founder with over 30 years of experience working as a restructuring professional in the banking, legal and investment communities.
Prior to founding Traxi in 2000, Tony was a Director at Balfour Investors, a private investment firm engaged in the acquisition and restructuring of financially distressed companies. Before that, he was a SVP at First Fidelity Bank (nka Wells Fargo), where he managed the bank’s commercial loan workout department. Tony began his professional career serving as a judicial law clerk to the Honorable Vincent J. Commisa, US Bankruptcy Court, District of New Jersey.
Tony has served in a number court appointed roles as Bankruptcy Court Examiner, Trustee and Financial Advisor. He has served on the Boards of Directors for several major corporations, including Flag Telecom until it was sold to Reliance Gateway Net Limited, Roberts Industries, Janus American Inc. and Fair Lanes Inc.
Tony received a BA in History from the University of Connecticut and a JD degree from the University of Bridgeport School of Law.
Robert J. Iommazzo
Bob Iommazzo offers Traxi clients over 30 years experience in financial, operational and business consulting services. Bob has restructured businesses in the distribution, manufacturing, real estate, fast food, casual dining and fine dining restaurants, construction, apparel, and many other industries. He has a specialty in advising family owned companies.
Prior to joining Traxi, Bob served as President of Scalamandre Silks, Inc., a luxury home furnishing design and marketing company. Bob was formerly a principal in the turnaround consulting firm of Nachman Hays Brownstein Inc. and a Partner with Coopers & Lybrand (now PwC).
Bob is a graduate of Fairleigh Dickinson University where he majored in accounting. He has served on many nonprofit boards and was chairman of the March of Dimes North Jersey Chapter. He was an officer in the Army National Guard.
Lee is a multi-disciplinary consultant with a specialization in crisis management, strategic communications and corporate restructuring. He has over 10 years experience working at the center of media and professional services.
He has advised broad spectrum of clients in media, publishing, energy, technology, telecommunications, and professional services.
Previously, Lee designed and launched the multimedia channel for Bloomberg Law, one of the most visible media platforms in legal journalism and reported extensively on many stories in business, corporate restructuring, bankruptcy and finance. Prior to Bloomberg, Lee clerked for the Hon. Raymond T. Lyons in the United States Bankruptcy Court, District of NJ.
Lee holds a B.A. from Wesleyan University and a J.D. from New York Law School. He is admitted to the bar in New York and New Jersey.
Susan Greco-Ericksen is an accomplished attorney with 25+ years of diverse legal experience counseling corporations, financial institutions, government and educational institutions in commercial and corporate transactions, real estate, bankruptcy, banking, and education. She is admitted to the State Bars in New York, New Jersey and Pennsylvania.
Most recently, Susan worked as in-house counsel at Avis Budget Group handling commercial real estate matters including concession agreements with Northeast area airports, leases, and acquisitions. She has many years of experience as a bankruptcy and commercial litigation attorney with the law firms of McCarter and English, Lowenstein Sandler, and Gibbons, and also worked as a legal specialist with the New Jersey Department of Education and State Board of Education drafting Administrative Code. Susan began her legal career as a judicial law clerk to the Honorable Rosemary Gambardella, United States Bankruptcy Court, District of New Jersey.
Susan holds a J.D. from Seton Hall University School of Law, a M.Ed. from the College of Saint Elizabeth, and a B.A. from New York University.
Barry O’Brien brings over 30 years of experience specializing in providing operational and financial advisory services to Traxi. He possesses a wealth of experience, working with clients across a wide range of industries, including distribution and manufacturing.
Prior to joining Traxi, Mr. O’Brien has held positions of CFO for a CPG Importer/Distributor, a CFO for a steel fabricator while bringing them out of Chapter 11, as well as the Controller for a food manufacturer. Barry has assisted companies in implementing new ERP systems, driving business strategy and profit growth.
Barry O’Brien received his bachelor’s degree from Rider University, his Master’s degree from Pace University and earned his CPA in the state of New Jersey.
Sam possesses 40 years of experience in accounting and consulting and is one of the foremost authorities in Healthcare consulting and accounting. A former partner with CohnReznick, he worked as an audit partner as well as a business development specialist for audit/tax and consulting engagements and as a client relationship strategist. Sam has focused his efforts in serving both middle market and large clients.
Sam currently serves on the Board of Trustees of the Kessler Foundation. He has previously served as the Chairman of the Audit and Compliance Committee for Children’s Specialized Hospital. Sam served as the financial advisor in the sale of one of the largest private hospitals in the nation (Kessler Rehabilitation Corporation) to a public company. He was the Chairman of the Board of one of New Jersey’s largest Preferred Provider Organizations (Consumer Health Network) and Vice Chairman of New Jersey’s first privately owned Health Maintenance Organization (Crossroads Health Plan). Both companies were sold under his leadership and guidance to public companies.
Neil helps companies produce strategy-driven results in the areas of growth, innovation, and transformation. Most recently, he turned around a machine learning data science company into an exit with a Kleiner Perkins backed supply chain analytics company. Senior executives trust his collaborative, execution focused style to lead their strategic and operational initiatives.
Neil has a 20+ year global (China, Europe, Israel, US) track record performing C-suite and consulting roles in the finance, government, media, tech/IT, and telecom sectors. Neil is also a contributor to Forbes covering digital, RPA and AI.
Neil holds a BS in Mathematics from The Citadel and an EMBA from Duke University.
Bill brings over 25 years of turnaround and operational experience, particularly in the areas of sales, manufacturing, financial management and strategy.
Prior to joining Traxi, Bill was the President of Schaffner Manufacturing Company a mid-sized producer of metal finishing products. In his tenure as President, Bill successfully grew the company through a combination of organic growth and an aggressive acquisition strategy, effectively doubling revenue and increasing EBITDA threefold. Completing three major deals in ten years, Bill demonstrated expertise in identifying, purchasing, and integrating distressed assets into the company’s operations. Schaffner Manufacturing was sold in 2019 to Jason, Inc.
Bill holds his BS in Industrial Engineering from Penn State University. He earned his MBA from the University of Louisville.
Paul’s experience spans investment banking, distressed assets acquisition, workout, recovery, securitization, high-yield structured finance, equity joint ventures and fundraising. He’s handled over $10 billion in distressed assets, loans and securities.
Paul is Executive Managing Director at Greystone Bassuk a real estate capital intermediary and financial advisor to major developers. Previously Paul was at L&L Holding Co, where he headed the company’s capital raising activities and was responsible for raising in excess of $2.5 billion of equity across their portfolio. Prior to that Paul was a Principal with AFC Realty Capital where he originated high-yield structured real estate financings and spearheaded the firm’s Restructuring practice. He was also a Principal of Allegiance Capital Partners and a Director at Deutsche Banc Mortgage Capital.
Paul holds his BA from Rutgers College where he graduated with distinction. He earned his JD from Rutgers University Law School and was an editor of the Law Review. He is a council member of Urban Land Institute.
Garrett Sheehan (Gary), is a Senior Advisor at Traxi. He is an expert at sourcing institutional and offshore capital for real estate development.
Gary is the President of the Florida Fund LLC, an affiliate of ARCTRUST, a private REIT focused on the acquisition and development of net leased properties. Before that he was a Managing Director at Sentinel Real Estate Corporation, a private New York-based real estate investment manager and before that, he was Managing Director at Jones Lang Wootton, North America (now Jones Lang LaSalle), serving as a member of the Executive Committee and co-head and partner in its Investment Sales and Finance Group.
Gary received a Bachelor of Arts degree from Trinity College and a graduate degree from Oxford University.
For more information, please visit us at www.traxi.com.
18 Bank Street, Suite 200,
Summit, NJ 07901