Three Hotze brothers took over CECO as it faced foreclosure and won Turnaround of the Year

Compressor Engineering Corporation, a Houston family business founded in 1964, discovered in 2014 that losses had been hidden in its construction accounting, leaving it on the verge of imminent bankruptcy. Two of the five Hotze brothers who owned the firm left, and the other three — Richard, Mark and Steven — took over and ran it through the crisis.

With a turnaround team, the brothers convinced senior lenders the business could survive, won a forbearance agreement and recapitalized the company. CECO survived the liquidity crisis, avoided bankruptcy, refinanced all senior debt at par and delivered the two best years of financial results in its history, with projected revenue above $100 million.

In 2016 the Turnaround Management Association's Chicago/Midwest chapter named CECO its Large Turnaround of the Year. Two years later, the brothers who had left sued the three who stayed, claiming their rescue breached fiduciary duties; a Houston jury returned a take-nothing verdict.

CECO avoided bankruptcy, refinanced all senior debt at par, delivered its two best years with revenue above $100 million, and won TMA's Large Turnaround of the Year 2016.

The founding family's continuity let lenders trust the rescue plan.

Returning to the core legacy business stabilized operations quickly.

A forbearance agreement bought the time needed to recapitalize.

The owners' own money and names were on the line, aligning incentives.

When a family firm is dying, the owners who stay and take operational control can save it — even when the siblings who left later sue them.

CECO continued as a family-owned operation after the recapitalization, with Richard and Mark Hotze still leading the company. The 2018 jury verdict confirmed the rescue was legitimate, ending a $30 million lawsuit from the siblings who had walked away.