mBank has been recognized with the 2013 Restructuring Community Impact Award by The M&A Advisor, for helping Manistique’s second largest employer evade permanent closure. mBank is the principal subsidiary of Mackinac Financial Corporation [Nasdaq: MFNC.]
According to a press release from mBank, 120 nominees representing over 300 companies, were finalists for the awards.
The mBank award was the result of a 10-month effort to lead Manistique’s second largest employer, Manistique Papers Inc. (MPI), through troubled financial times. MPI, a company with approximately 150 local employees and a 72-acre manufacturing site, was facing Chapter 7 bankruptcy, a closure that would have devastated the local economy. mBank responded and within a week purchased the senior secured debt at a discount from the former lender helping MPI to avoid Chapter 7 bankruptcy and liquidation.
The next step was to keep the company operational during the Chapter 11 process to allow time for a potential buyer to be procured. mBank provided additional working capital through a new ‘debtor in possession’ loan arrangement. The above noted credit facilities were supported by the Michigan Economic Development Corporation (MEDC) in conjunction with the Governor’s Office through various loan participation programs. As a result, the mill was able to re-open after a brief six-week closure in August 2011.
In May 2012, after months of negotiations, MPI and mBank reached an agreement with The Watermill Group, a private equity investment firm based in Massachusetts, to purchase the mill through the 363 bankruptcy auction process. mBank was the lead facilitator of the transaction and provided the needed funding to consummate the sale with continued participation assistance from the MEDC, and new financing from the USDA through various loan guarantee programs.
mBank President & CEO Kelly W. George, commenting on mBank’s role, stated, “We at mBank are very humbled and proud that we were able to boldly provide the financial support and expertise to a vital member of our local community to save hundreds of jobs and to help rehabilitate the paper mill, a long standing member of our business community for over 90 years. It has been a privilege to partner with The Watermill Group and the various government agencies like the MEDC and the USDA to achieve such a terrific and worthwhile outcome. I believe that this is the essence of real community banking; providing local banking services and financial expertise to foster economic development in order to preserve and create employment opportunities, keeping our communities vibrant and strong with good quality of life for all.”