Instant Brands and certain of its affiliates filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. In addition, the company is commencing ancillary proceedings in Canada under the companies’ Creditors Arrangement Act (CCAA) seeking recognition of the U.S. Chapter 11 proceedings in Canada.
In connection with the court-supervised process, Instant Brands received a commitment for $132.5 million in new debtor-in-possession financing from its existing lenders. Following court approval, this new financing, combined with cash generated from the company’s ongoing operations, is expected to support the business during the court-supervised process.
Additionally, the company appointed Adam Hollerbach, partner and managing director at AlixPartners, chief restructuring officer. Hollerbach has more than 20 years of experience in the restructuring advisory field.
“Instant Brands delivers houseware and small kitchen appliance products designed to meet consumer needs around the world. Over the past three years, we executed across five key strategies to build a profitable business. Our company continues to drive positive operating cash flows. We brought innovation to our core business across all brands, entered several new product categories, expanded our global footprint, progressively improved how we leverage our global infrastructure and last but not least, we have created best-in-class global consumer engagement through our digital eco-system,” Ben Gadbois, president and CEO of Instant Brands, said. “After successfully navigating the COVID-19 pandemic and the global supply chain crisis, we continue to face additional global macroeconomic and geopolitical challenges that have affected our business. In particular, tightening of credit terms and higher interest rates impacted our liquidity levels and made our capital structure unsustainable. In recent months, we have been working closely with all of our financial stakeholders to position the company for its next phase of success.
“As we move through this process, we remain focused on serving and connecting with our consumers around the world, and we are grateful for their trust in us and our products. We are committed to finding a positive outcome. We thank our Instant Brands employees in factories, distribution centers and offices all over the world for their ongoing hard work and excellence, and we also extend our gratitude to our retail partners, suppliers and vendors for their continued support.”
The company’s entities located outside the United States and Canada are not included in the Chapter 11 filings.
The company filed customary motions seeking court approval to continue to support its operations during the court-supervised process, including the continued payment of employee wages and benefits without interruption. Instant Brands expects to receive court approval for these requests shortly. The company intends to pay vendors, suppliers and distributors in full under normal terms for goods and services provided on or after the filing date.
Davis Polk & Wardwell is serving as Instant Brands’ legal counsel and AlixPartners is serving as restructuring advisor.
