Edwin Watts Golf bankrupt; looks to sell assets, liquidate inventory

By Caroline Salls

Pittsburgh, Nov. 4 - Edwin Watts Golf Shops, LLC filed Chapter 11 bankruptcy on Monday in the U.S. Bankruptcy Court for the District of Delaware.

The company's bankruptcy petition said it reached a non-binding agreement in principle on Oct. 31 under which Hilco Merchant Resources, LLC would conduct a liquidation or sale of some of Edwin Watts' assets and GWNE, Inc. would acquire some assets not liquidated by Hilco and assume specified liabilities.

Edwin Watts Golf said the final terms of the stalking horse agreement are still being negotiated.

Chief financial officer Lynda K. Barr said in a statement filed with the court that GWNE will purchase and continue to operate a significant number of the company's locations under the Edwin Watts Golf name. Hilco will act as the agent to liquidate inventory at the remaining stores.

Barr said the agreement provides for a $45 million guaranteed amount to be paid to the company, subject to adjustment based on the inventory.

Financing commitment

In connection with the bankruptcy filing, Edwin Watts secured a commitment for $38 million in debtor-in-possession financing.

PNC Bank, NA is the lender agent.

Interest will accrue at the alternate Base rate plus 125 basis points.

The DIP loan will mature on the earliest of Dec. 31, the effective date of a reorganization plan, the closing of the company's sale, conversion or dismissal of the bankruptcy case and Nov. 26 if the final order has not been entered.

The company is seeking interim access to $5 million of the financing.

Debt information

According to court documents, Edwin Watts Golf has $100 million to $500 million in both assets and debt.

The company's largest unsecured creditors are:

• Callaway Golf Co. of Carlsbad, Calif., with a $4.63 million merchandise claim;

• Taylor Made - Adidas Golf Co. of Carlsbad, Calif., with a $3.82 million merchandise claim;

• Titleist of Fairhaven, Mass., with a $3.19 million merchandise claim;

• Nike USA Inc. of Beaverton, Ore., with a $1.79 million merchandise claim;

• Footjoy of Brockton, Mass., with a $1.54 million merchandise claim;

• Cobra Puma Golf Inc. of Carlsbad, Calif., with a $1.54 million merchandise claim;

• Adams Golf, Ltd. of Plano, Texas, with a $1.19 million merchandise claim; and

• Cleveland Golf Co. of Newport Beach, Calif., with a $1.09 million merchandise claim.

The company is represented by Klehr Harrison Harvey Branzburg LLP.

Edwin Watts Golf is a Fort Walton Beach, Fla.-based specialty golf retailer. The Chapter 11 case number is 13-12876.

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