Instant Brands files Chapter 11, lines up $132.5 million DIP loan

By Sarah Lizee

Olympia, Wash., June 12 – Instant Brands filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas, according to a Monday afternoon press release.

The company said the process will give it time and flexibility to continue ongoing discussions with all of its financial stakeholders in an effort to achieve a consensual path forward that strengthens the company’s financial position.

In connection with the court-supervised process, Instant Brands has 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, the company 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,” Ben Gadbois, president and chief executive officer of the company, said in the release.

“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.”

The company is also starting ancillary proceedings in Canada under the Companies' Creditors Arrangement Act (CCAA) seeking recognition of the U.S. proceedings in Canada.

The company's entities located outside the United States and Canada are not included in the Chapter 11 filings.

The company has filed a number of 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.

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.

Additionally, the company has appointed Adam Hollerbach, partner and managing director at AlixPartners, as chief restructuring officer.

In its petition, the company listed 1,000 to 5,000 creditors, $500 million to $1 billion in assets and $500 million to $1 billion in liabilities.

Its largest unsecured claimholders are Zhejiang Tianxi Kitchen Appliance Co., based in Lishui, China, with $16.29 million trade supplier claim, Midea Electric Trading, based in Singapore, with a $16.11 million trade supplier claim, and Zhejiang Aishida Household Equipment, based in Jiashan, China, with a $3.55 million trade supplier claim.

Davis Polk & Wardwell LLP is serving as Instant Brands' legal counsel, and AlixPartners is serving as restructuring adviser.

Instant Brands is a Downers Grove, Ill.-based manufacturer of kitchen and houseware brands, such as Instant Pot, Pyrex, Corelle, CorningWare, SnapWare, Chicago Cutlery and Visions. The Chapter 11 case number is 23-90716.

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