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Kraus Carpet files Chapter 15, to sell TPS business through CCAA case
By Caroline Salls
Pittsburgh, Sept. 12 – Kraus Carpet Inc. made a Chapter 15 bankruptcy filing Tuesday in the U.S. Bankruptcy Court for the District of Delaware to gain U.S. court recognition of a Companies’ Creditors Arrangement Act case filed in the Ontario Superior Court of Justice.
The company said the Water Works and Sewer Board of the Town of Centre, Ala., filed a lawsuit in May 2017 against entities involved or previously involved in carpet manufacturing, including Kraus USA Inc.
In addition, a case was filed by Aquafil USA Inc. against Kraus Carpet LP in the U.S. District Court for the Northern District of Georgia on Aug. 31.
Kraus said it has “concluded that it was in the best interests of the debtors and their stakeholders to pursue a sale of the two operating divisions of the company, the TPS business and the broadloom business.”
The company said it has executed a purchase agreement for the TPS business with buyers Q.E.P. Co., Inc. and Roberts Co. Canada Ltd., subject to approval and a vesting order from the Canadian court and recognition of that order by the U.S. court.
The purchase price was not disclosed in the court documents.
As of Aug. 30, the Kraus Group said it is still in talks with the key supplier regarding receiving an offer for the Broadloom business or some of its assets.
According to court documents, Kraus Carpet had $133.68 million in assets and $180.45 million in debt as of July 31.
The company is represented in the Chapter 15 case by Morris Nichols Arsht & Tunnell, LLP.
Kraus is a Waterloo, Ont.-based flooring company. The Chapter 15 case number is 18-12057.
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