Instant Brands files Chapter 11 plan and disclosure statement

By Sarah Lizee

Olympia, Wash., Dec. 22 – Instant Brands Holdings Inc. filed a Chapter 11 plan of reorganization and disclosure statement on Friday with the U.S. Bankruptcy Court for the Southern District of Texas.

As background, the company received approval from the court to sell its housewares and appliance businesses to affiliates of Centre Lane Partners for $350.8 million in October. However, the parties were unable to obtain the requisite regulatory approvals for the sale within the outside date under the asset purchase agreement.

As a result, the debtors terminated the sale agreement, and an informal group of crossover lenders and the official committee of unsecured creditors worked together with the debtors to build the plan and facilitate a reorganization of the housewares business via the equitization of class 3 prepetition term loan claims.

More specifically, the plan contemplates the equitization of over $390 million of the term loan claims into 100% of the new equity interests in the reorganized debtors, and the distribution of litigation trust interests – 85% to holders of term loan claims and 15% to holders of general unsecured claims – in a litigation trust created to investigate and pursue possible causes of action.

The litigation trust will be financed by a $6 million facility. All prepetition term loan lenders will be allowed to participate in the financing on a pro rata basis. To the extent a prepetition term loan lender does not want to participate, members of the informal group of crossover lenders have agreed to finance the litigation trust financing.

Holders of product liability claims will be permitted to pursue their claims against insurers and third-party indemnitors under all available and applicable insurance contracts and third-party indemnifications, and, to the extent not satisfied, will be permitted to assert their excess product liability claims as general unsecured claims.

All other classes of claims held by third-party creditors would be left unimpaired under the plan, while the holders of existing interests would receive no consideration.

The plan also provides for committed secured exit financing sufficient to fund the debtors’ emergence from bankruptcy, including the payment of all allowed administrative claims, debtor-in-possession super-priority claims, professional fee claims, U.S. trustee fees and information officer fees, other secured claims, priority tax claims, and other priority claims, and to provide working capital required by the reorganized debtors’ businesses at emergence.

The company is seeking a Jan. 8 hearing on approval of the disclosure statement.

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 company filed bankruptcy on June 12, 2023 under Chapter 11 case number 23-90716.

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