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Pegasus Home files bankruptcy, eyes sale to Blue Torch affiliate
By Sarah Lizee
Olympia, Wash., Aug. 24 – Pegasus Home Fashions, Inc. filed Chapter 11 bankruptcy on Thursday in the U.S. Bankruptcy Court for the District of Delaware with plans to sell its assets, according to court documents.
As part of the process, the company has lined up $25 million in debtor-in-possession financing, consisting of a $20 million asset-based revolver with Webster Business Credit, and a $5 million term loan with Blue Torch Finance, LLC. Webster and Blue Torch are prepetition secured lenders to the company.
The DIP revolver will bear interest at SOFR plus 250 basis points, and the DIP term loan will bear interest at SOFR plus 800 bps.
The financing will also include a rollup of all outstanding ABL debt.
The facilities are set to mature in 150 days.
Upon court approval, the DIP facilities will be secured by a lien on substantially all of the debtors’ assets, most of which were previously collateral of the prepetition secured parties.
The company has also negotiated the terms of a stalking horse agreement with a affiliate of Blue Torch for the Pegasus enterprise.
The purchase price would include assumed liabilities, assumption of or payment in cash of all debt under a prepetition revolver, and a credit bid of prepetition term loan debt and DIP term loan debt.
In its petition, the company listed 200 to 999 creditors, $100 million to $500 million in assets and $100 million to $500 million in liabilities.
No unsecured creditors were listed with claims of $1 million or more.
Young Conaway Stargatt & Taylor, LLP is the debtors’ counsel, RAS Management Advisors, LLC is financial adviser, and SSG Capital Advisors, LLC is investment banker.
Elizabeth, N.J.-based Pegasus Home Fashions manufactures bedding and home products. The Chapter 11 case number is 23-11235.
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