Global Home Products files Chapter 11 bankruptcy, obtains interim approval for $65 million DIP

By Caroline Salls

Pittsburgh, April 12 - Global Home Products, LLC filed for Chapter 11 bankruptcy Monday in the U.S. Bankruptcy Court for the District of Delaware.

Global Home Products said its businesses have suffered from shrinking margins as a result of increasing energy and raw material costs and severe industry-wide competition at the lower-priced end of its product range.

As part of the filing, the company obtained interim court approval of an up to $65 million revolving debtor-in-possession facility from Wachovia Bank, NA.

According to court documents, the company has $50 million to $100 million in assets and more than $100 million in debt.

The company's debt includes $110.81 million owed to senior lenders, about $200 million to junior lender Madeline LLC and $66 million to unsecured creditors.

According to the DIP motion, the company has been forced to negotiate a series of forbearances in connection with its pre-bankruptcy loans from Wachovia since May 2005.

The term of the DIP will be the earlier of Oct. 31 or upon an event of default.

Interest on all outstanding advances will be 9%.

The company will pay a $650,000 facility fee.

A final hearing on the DIP is scheduled for May 4.

The company's largest unsecured creditors include:

• Zhejiang Taizhou Aishida Electric Equipment, Zhejiang, China, with a $4.56 million trade claim;

• Zhejiang Supor Cookware Co. Ltd., Zhejiang, China, with a $4.27 million trade claim;

• Amerada Hess Corp., Charlotte, N.C., with a $3.71 million trade claim;

• Lewisburg Container Co. Inc., Kansas City, Mo., with a $1.97 million trade claim;

• Imasa LC Industria Mexicana del Aluminio, San Antonio, Texas, with a $1.96 million trade claim;

• Morrison Express Corp., Forest Park, Ga., with a $1.24 million trade claim; and

• Packaging Credit Co., Chicago, with a $1.09 million trade claim.

Global Home Products, through its Anchor Hocking, The Burnes Group and WearEver businesses, is a Westerville, Ohio-based designer, marketer and manufacturer of branded consumer and specialty products to retail and hospitality customers and original equipment manufacturers. Its Chapter 11 case number is 06-10430.

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