By Robert DiNozzi, originally published in Journal of Corporate Renewal on October 6, 2025.
In 2023, Namco Pool & Spa was on the brink of financial failure—overleveraged, burdened by nonperforming leases and facing a liquidity crisis. Bankruptcy would have wiped out key investments, strained customer and supplier relationships and drained resources in protracted proceedings. Instead, two TMA member firms came together to execute an out of court Article 9 restructuring that preserved operations, protected jobs and delivered a full recovery for the senior lender while streamlining the transition to a leaner, more sustainable business.
In turnaround management, innovation often emerges at the intersection of expertise, timing and collaboration.
The Namco story offers a compelling case study not only in the mechanics of an Article 9 restructuring, but also in the power of relationships forged within the TMA community.
This “better together” turnaround was profiled on a recent TMA Turnaround Square webinar, featuring Johnny Mueller of Lippes Mathias and Adam Duso of Second Wind Consultants, along with Annette Jarvis of Greenberg Traurig, Justin Barr of Carter Bank, and Jacen Dinoff of KCP Advisory.
A TMA Relationship That Led to a Solution
The collaboration that led to Namco Pool & Spa’s restructuring began at a Turnaround Management Association (TMA) event. Mueller, a partner at Lippes Mathias and a long-time TMA member, discussed a challenging case with Robert DiNozzi of Second Wind Consultants during the final evening of the 2023 TMA Northeast Regional Conference. What started as a casual end-of-conference conversation evolved into a discussion about potential solutions for Namco’s financial distress.
Mueller had been approached by a client whose company, Namco Pool & Spa, was facing severe financial challenges. The business was overleveraged, dealing with mounting landlord demands, non-performing leases and cash flow constraints.
Founded as a leading retailer in pools, hot tubs and backyard accessories, Namco built a strong presence throughout the Northeast U.S. During the pandemic boom, as homeowners invested heavily in outdoor living spaces, Namco seized the opportunity, rapidly expanding to over 20 retail locations at its peak.
The company took on significant debt to fuel its expansion, leveraging both traditional bank financing and loans from its parent company. As interest rates climbed and discretionary spending tightened in the postpandemic economy, demand for luxury home upgrades plummeted. Namco’s oversized footprint and expensive leases compounded the problem. With too many underperforming locations and mounting financial pressure, the company was facing a liquidity crisis that threatened its survival.
“One of the biggest challenges we faced was that the parent company had made significant loans to Namco,” Mueller said. “In a bankruptcy, that debt would have been treated as an unsecured liability and likely wiped out entirely.”
Bankruptcy would not only result in the probable discharge of the parent’s investment—it would also, as a public facing process, damage Namco’s reputation, affecting relationships with customers and suppliers. Additionally, bankruptcy costs and protracted proceedings could further erode the business’s ability to sustain operations.
“A Chapter 11 would have been prohibitively expensive, time consuming and put customer and supplier relationships at risk. A process was needed that would provide certainty and continuity,” said Jarvis, the co-managing shareholder with Greenberg Traurig’s Salt Lake City office.
As Mueller detailed the specific challenges posed by a Chapter 11 filing, Dinozzi then suggested that an Article 9 restructuring might offer a viable solution with regard to both the parent company debt and the non-performing leases.
A call was then scheduled for the week following TMA NERC, where Mueller connected directly with Adam Duso, CEO of Second Wind Consultants. Within days, the two firms were working together to develop a strategy that would preserve business continuity while restructuring its financial obligations.
The Role of Article 9 in Out-of-Court Restructuring
“[Article 9] is a remedy, not just a foreclosure tool,” Jarvis said. “When lenders are undersecured, they can work cooperatively with the business to maximize recovery—faster and with greater certainty than bankruptcy.”
Traditionally, Article 9 of the Uniform Commercial Code (UCC) has been associated with lender remedies, primarily in the form of liquidating collateral after a borrower defaults. However, in recent years, the Article 9 sale has been adapted to stand at the center of a restructuring methodology, facilitating going concern transfers that resolve distressed assets of legacy liabilities without judicial process, allowing businesses to transition to new ownership while minimizing disruption and maximizing value.
“The traditional view of Article 9 is liquidation, but when properly structured, it’s one of the most efficient ways to transition a distressed business while maximizing value for all stakeholders,” said Second Wind’s Duso.
“From a bank’s perspective, you’re almost always in a better position selling a going concern than liquidating collateral,” said Justin Barr, SVP Special Assets at Carter Bank. “Here, you have a cooperative process, and because it’s cooperative one can move very quickly. If you can gain the cooperation of all the parties here and put all these pieces in place, I have trouble coming up with a reason why a special assets banker wouldn’t move forward with this Article 9 structured exit construct.”
An Article 9 structured exit hinges on aligning the incentives of four key stakeholders:
- The Senior Secured Lender. Seeking maximum recovery on their collateral while avoiding the costs and inefficiencies of judicial process.
- The Existing Business Owner. Incentivized by the prospect of preserving value, resolving any personally guaranteed liabilities and the opportunity to participate in the new operating entity.
- The Incoming Buyer. Incentivized by the opportunity to acquire the business at asset cost, with the remainder of seller benefit being contingent on performance over time.
- The New Lender or Capital Provider. Incentivized by the ability to finance into a clean balance sheet, irrespective of previous liabilities.
When properly executed, this approach provides a faster, cost effective and controlled alternative to traditional insolvency proceedings.
“The flexibility of an Article 9 transaction allows parties to move quickly and tailor a solution that works for all stakeholders,” Mueller said. “That speed and control make all the difference.”
Defining Roles & Next Steps
Once the decision was made to pursue an Article 9 restructuring with Namco, the collaboration between Lippes Mathias and Second Wind took shape, with each firm assuming a distinct role in the process. Lippes Mathias, led by Mueller and his corporate transactions colleague, Andrew Olek, focused on the legal structuring—ensuring compliance with Article 9 provisions, drafting lender agreements and negotiating lease settlements. Meanwhile, Second Wind, led by Duso, handled the financial structuring, creditor negotiations and operational transition to ensure business continuity.
“This deal required an integrated effort—legal, financial, operational. Each firm had a distinct role, and success depended on executing those roles effectively,” said Mueller.
With responsibilities defined, the team turned its attention to engaging the senior lender. The lender was unfamiliar with Article 9 structured exits and hesitant about proceeding. Recognizing this, Second Wind removed the burden from the bank. Instead of conducting the Article 9 transaction themselves, the senior lender agreed to sell its note at par to the second-position lender, who would then step into first position and execute the sale transaction. This approach allowed the process to move forward without friction.
“The senior lender recovered in full, which likely wouldn’t have happened in a bankruptcy scenario. That’s a huge advantage of this approach,” said Duso.
“Instead of chasing an overleveraged business for repayment, Article 9 allows lenders to convert a distressed situation into a performing asset with a clear exit strategy,” Jarvis said.
Addressing Landlord Challenges
Beyond lender negotiations, another critical component of the restructuring was securing a viable footprint for the business post-transaction. With over a dozen locations, each with different landlords, the lease negotiations proved to be one of the most intricate aspects of the process. Mueller and his team at Lippes Mathias worked through each lease individually, renegotiating terms where possible and arranging buyouts where necessary to ensure that the new entity would not be encumbered by unsustainable obligations.
“Lease negotiations were a critical piece of the puzzle. Without securing the right locations at sustainable lease terms, the business wouldn’t have been viable post-transaction,” said Mueller.
The Outcome: A Restructured, Bankable Business
By aligning the interests of the stakeholders and structuring the transaction to preserve continuity, the teams were able to secure an outcome that benefited all parties.
The senior lender exited at par, recovering its loan in full without the extended costs of a bankruptcy proceeding. The second-position lender preserved the majority of its investment, avoiding the total loss that Chapter 11 would likely have imposed. Employees remained with the company, customer relationships were preserved and the business transitioned into a leaner, more sustainable operation with an optimized footprint and a manageable capital structure.
“This process replaces a failing balance sheet with a clean capital structure, making the company stronger and more attractive to lenders and investors,” said Jacen Dinoff of KCP Advisory Group.
Better Together
Every Article 9 restructuring hinges on aligning the incentives of the material stakeholders around a transaction that ensures the future viability of the new entity. Achieving that viability requires collaboration across the turnaround ecosystem—financial advisors, debtor and creditor representation, lenders and restructuring professionals—each playing a critical role in structuring a sustainable outcome.
“An Article 9 restructuring isn’t just about legal mechanics—it’s about executing a process that ensures long-term viability. The key is having the right professionals align around a common objective to make that happen,” said Dinoff.
“Better Together” is more than a slogan—it’s a philosophy and a framework for synergy, innovation and value creation that leverages the relationships fostered within TMA. The successful turnaround of Namco Pool & Spa was the result of both individual expertise and of a collaborative ethos—one that truly makes us better together.