At Home files for Chapter 11, closing “underperforming” stores

BY Fraser Tennant

In a move that will see the closure of 26 “underperforming” stores, home goods chain At Home has filed for Chapter 11 bankruptcy to strengthen its financial foundation and position the business for long-term success.

The filing will allow At Home to implement a restructuring support agreement (RSA) with lenders holding more than 95 percent of the company’s debt. The agreement sets forth terms of a prearranged financial restructuring that will eliminate substantially all of the company’s nearly $2bn in funded debt.

Pursuant to the RSA, following the consummation of its restructuring, the company expects there will be a transition of ownership of At Home to the lenders supporting the RSA and providing the company with new capital.

“We are pleased to have reached this agreement with our lenders, which represents a critical and positive advancement of our work to best position At Home for the future,” said Brad Weston, chief executive of At Home. “Over the past several months, we have taken deliberate steps to strengthen the foundation of our business – sharpening our focus, elevating our customer value proposition and driving operational discipline.”

In connection with this process, At Home is entering into an agreement for $600m in debtor-in-possession financing, which includes a $200m capital infusion from certain of its existing lenders and a ‘roll up’ of $400m of existing senior secured debt.

At Home has also filed a number of customary ‘first day’ motions with the bankruptcy court to maintain business operations, facilitate the efficient administration of the Chapter 11 cases and uphold its go‑forward commitments to its stakeholders, including the continued payment of team member wages and benefits without interruption.

“These efforts are aimed at delivering sustained sales growth, optimizing our inventory management, improving efficiency and enhancing overall profitability,” continued Mr Weston. “While we have made significant progress advancing our initiatives to date, we are operating against the backdrop of an increasingly dynamic and rapidly evolving trade environment as we navigate the impact of tariffs.”

Upon emergence from the prearranged restructuring process, At Home expects to move forward with new owners and a meaningfully strengthened balance sheet.

Mr Weston concluded: “The steps we are taking to fully de-lever our balance sheet will improve our ability to compete in the marketplace in the face of continued volatility and increase the resilience of our business for the long term.”

News: At Home files Chapter 11 bankruptcy, will close 26 stores

PE-backed Marelli files for Chapter 11 bankruptcy protection

BY Richard Summerfield

Automotive parts maker Marelli, owned by private equity firm KKR, has filed for Chapter 11 in the US Bankruptcy Court for the District of Delaware.

According to a statement released by Marelli, the company filed for bankruptcy in order to comprehensively restructure its long-term debt obligations. Approximately 80 percent of the company’s lenders have signed an agreement to support the restructuring, which will deleverage Marelli’s balance sheet and strengthen its liquidity position.

Throughout the Chapter 11 process and moving forward, Marelli does not expect to experience any operational impact from the bankruptcy and will continue to work closely with its customers, suppliers and partners to innovate and invest in its portfolio of advanced technologies that will differentiate the vehicles of the future and transform mobility.

Marelli is a key supplier to both Nissan and Stellantis, providing everything from lighting and interior components to propulsion, exhaust and chassis parts.

To support the company during the Chapter 11 process, Marelli has received a significant commitment for $1.1bn in debtor-in-possession (DIP) financing from its lenders. This additional capital underscores lenders’ continued support and confidence in the company’s underlying business and its long-term potential. Upon court approval, the DIP financing, coupled with cash generated from the company’s ongoing operations, is expected to provide sufficient liquidity to support the company through the Chapter 11 process. In addition to the DIP financing, the restructuring agreement provides for a comprehensive deleveraging transaction through which the DIP lenders will take ownership of the business upon emergence from Chapter 11, subject to a 45-day overbid process.

“At Marelli, we have been proactive in making necessary adjustments to stabilize our financial position so that we can continue to deliver long-term benefits for our valued customers, partners and employees,” said David Slump, president and chief executive of Marelli. “While we are pleased with our recent progress and profitability, industry-wide market pressures have created a gap in working capital that must be addressed. After careful review of the Company’s strategic alternatives, we have determined that entering the chapter 11 process is the best path to strengthen Marelli’s balance sheet by converting debt to equity, while ensuring we continue operating as usual. Taking this action now provides access to new liquidity to fund our long-term growth and innovation pipeline, and ensures our customers and partners all over the world can continue to rely on Marelli for on-time delivery of advanced technologies that shape the vehicles of the future.

“Marelli’s focus on innovation, digitalization and technology has never been stronger,” he continued. “As we move through this process, we will continue to serve our customers and work with our suppliers and partners as they have come to expect. We are also grateful for the hard work and dedication of our employees who remain focused on delivering the best service possible.”

News: Nissan supplier Marelli files for Chapter 11, secures $1.1 billion in new financing

Solar Mosaic files for Chapter 11 to restructure and recapitalise

BY Fraser Tennant

Amid rising interest rates, legislative uncertainty and a fragmented capital market, Solar Mosaic, a FinTech platform for sustainable home improvements, has filed for Chapter 11 bankruptcy. 

The filing will allow Mosaic to complete a restructuring and recapitalisation supported by a number of its existing lenders, while simultaneously conducting a comprehensive marketing process of its platform and other assets.

With macroeconomic challenges facing the entire residential solar industry, Mosaic determined – in consultation with its board of directors and advisers – that a court-supervised process was the best way to maintain its loan servicing platform, effectuate a full sale and marketing process for its assets, and maximise value for its stakeholders.

“This marks a significant step for Mosaic to address our financial position amid the macroeconomic challenges facing the residential solar industry, as well as the recent legislation passed by the House of Representatives that rolls back residential solar tax credits,” said Patrick Moore, chief executive of Solar Mosaic.

Throughout the process, Mosaic expects to remain fully operational without disruption, committed to working with its network of installers, investors and capital markets partners, and customers. It also plans to maintain its loan servicing operation, ensuring customers can continue to pay their loans as planned and collections are remitted to loan owners.

To that end, Mosaic will receive $45m in debtor-in-possession financing from its existing lenders, including $15m in new money financing which, following court approval, is expected to fund the company’s ongoing operations and administrative expenses during the Chapter 11 cases.

Mosaic has also filed a number of customary motions with the bankruptcy court to ensure that its operations continue as usual during the Chapter 11 process. This includes motions requesting court authority to pay employee wages and benefits, compensate certain vendors and suppliers on a go-forward basis, and facilitate the completion of partially finished installation projects.

Founded in 2010, Mosaic is a pioneer in clean energy lending, providing innovative solutions for financing solar, battery storage and more. The company has funded $15bn in loans to date, helping more than 500,000 households make their homes more sustainable and efficient.

Mr Moore concluded: “Throughout the Chapter 11 process, we remain focused on maintaining stability for our customers, business partners and employees.”

News: Warburg Pincus-Backed Solar Mosaic Files for Bankruptcy

Ascend files for Chapter 11 to deliver “stronger” future

BY Fraser Tennant

In a move designed to strengthen its balance sheet and improve its financial foundation, chemical manufacturing company Ascend Performance Materials, along with 10 of its affiliates, has filed for Chapter 11 bankruptcy protection.

With the support of its lenders, Ascend will use the process to pursue a value-maximising restructuring transaction that will enable the company to emerge from Chapter 11 as a healthy, well-capitalised business.

To help achieve that end, the bankruptcy process will enable Ascend to deleverage its balance sheet and continue providing best-in-class materials. Ascend’s subsidiaries that are located outside of the US are not included in the Chapter 11 filings.

Ascend has also received a commitment for $250m in debtor-in-possession financing from its lenders, which is expected to provide the company with sufficient liquidity to support it throughout the Chapter 11 process, which Ascend aims to complete in approximately six months.

“Ascend has made significant strides in transforming our business, with a focus on efficiency and driving cost reductions while ensuring that we are able to operate safer than we ever have before,” said Phil McDivitt, president and chief executive of Ascend Performance Materials. “Over the last several months, we have been working with our lenders to define the best path forward for Ascend.

“We expect that the restructuring will substantially reduce Ascend’s funded debt obligations and ensure that we are well-positioned to continue executing on our long-term strategy,” he continued. “We are confident that the Chapter 11 process will put us on a path to becoming an even stronger company with a healthier financial structure and better positioned to continue delivering high-performance materials that improve the lives of our customers.”

Founded in 2009 and headquartered in Houston, Texas, Ascend has nine global locations, including five fully integrated manufacturing facilities in the southeastern US and an engineering plastics compounding facility in Europe. The company has nearly 1650 customers globally.

The company intends to operate as usual throughout the Chapter 11 process and will continue to manufacture and produce high-performance materials.

“Our lenders, who believe in the underlying value and potential of our business, have provided us with funding to support our business throughout the process,” concluded Mr McDivitt. “We are also grateful to our customers and partners for their ongoing support and to our employees for their hard work and commitment to working safely and supporting Ascend’s other values.”

News: Ascend Files For Chapter 11 Bankruptcy; Local Site To Continue Normal Operations

Digital transformation: PCH files for Chapter 11

BY Fraser Tennant

Amid growing financial strain, US direct to consumer marketing company Publishers Clearing House (PCH) has filed for Chapter 11 bankruptcy protection in order to reorganise its capital structure and improve its long-term growth trajectory.

According to the court filing, PCH entered bankruptcy with $490,000 in cash and approximately $40m in debts to employees, vendors, service providers and landlords after a years-long decline in its legacy direct mail marketing business.

The company intends to use the financial restructuring process to finalise its shift away from these legacy businesses to focus on its transformation to a pure digital advertising business.

To fund operations without disruption, PCH has lined up debtor-in-possession financing which, subject to court approval, the company anticipates will provide liquidity to support operations during the reorganisation process.

As part of this process, PCH has also engaged advisers to explore a variety of strategic options, including the potential sale of its digital assets or a capital infusion from a financial partner that will help fund the company’s longer-term business plan going forward.

“By taking these steps, we are breaking free from the past financial constraints of our legacy direct mail and online retail merchandise and magazine subscription operating model,” said Adam Goldberg, chief executive of PCH. “This action establishes a strong foundation for our future – enabling PCH to unlock the full potential of its digital advertising and consumer insights business.”

PCH’s renowned Prize Patrol team is expected to continue during the restructuring process, awarding prizes to sweepstakes winners across the US with the famous big cheque, champagne and flowers that have endeared the PCH brand to consumers for over 50 years.

“Our world-renowned sweepstakes will continue to be a cornerstone of our experiences,” added Mr Goldberg. “We intend to continue offering free-to-play entertainment and awarding prizes in the ordinary course of business during and after this process to uphold the historic legacy of PCH.”

Throughout the restructuring process, PCH is committed to operating in a business as usual manner in order to continue delivering for its valued customers, partners, clients and employees.

Mr Goldberg said the Chapter 11 filing “marks a crucial development in PCH’s transition to a digital advertising-supported entertainment company”.

News: Sweepstakes company Publishers Clearing House goes bankrupt