Instant Brands emerges from bankruptcy with $90 million revolver

By Sarah Lizee

Olympia, Wash., Feb. 28 – Instant Brands Holdings Inc. has emerged from Chapter 11 bankruptcy, according to a notice of effective date filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Texas.

The plan was confirmed on Feb. 22, as previously reported.

The company said the plan would provide for committed secured exit financing sufficient to fund the debtors’ emergence, 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.

According to a plan supplement filed with the court, the financing includes a $90 million senior secured revolving credit facility, with MidCap Financial Trust as administrative agent and lender.

The revolver will mature 60 months from closing and bear interest at SOFR plus 425 basis points.

“We have achieved the goals we set out when we initiated this process. Last November we separated and sold our appliances business and set that business up for success under new ownership,” Ben Gadbois, president and chief executive officer of Instant Brands, said in a press release last week.

“For our housewares business, we have continued driving strong performance with market share gain in key categories and secured a bright future for our iconic housewares brands."

As a reminder, 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 are 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 are 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 are left unimpaired under the plan, while the holders of existing interests would receive no consideration.

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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.