A U.S. bankruptcy judge on Tuesday approved Tupperware Brands’ proposal to make a sale of its assets to its lenders. This court approval of sale to its lender shall clear Tupperware to exit bankruptcy with most of its operations intact. U.S. bankruptcy Judge Brendan Shannon approved the Tupperware sale of its asset to lender at a court hearing in Wilmington, Delaware, saying it was the best available option for Tupperware.
(Image Credit: tupperware)
A U.S. bankruptcy judge approved a sale of Tupperware Brands paved the way for the iconic food-shortage company to soon exit Chapter 11 protection and continue offering its products while undergoing a hoped-for revitalization. Tupperware, the food storage and kitchen products company had tried to find a buyer for months before its bankruptcy filing, but none were willing to pay off the company’s $818 million in debt, Tupperware attorney Spencer Winters said at the hearing.
Tupperware asset sale to lender
The lender group that is acquiring Tupperware includes Stonehill Capital Management Partners and Alden Global Capital. The two investment firms that acquired Tupperware debt at a steep discount over the summer, according to Tupperware’s court filings. The lenders are providing $23.5 million in cash and over $63 million in debt relief for the sale of Tupperware asset.
Tupperware deal approval
The sale given the court’s green light in Delaware still is subject to closing conditions. Under terms of the deal, a group of lenders is buying Tupperware’s brand name and various operating assets for $23.5 million in cash and more than $63 million in debt relief.
The sale includes Tupperware’s brand name and its assets in core markets including the U.S., Canada, Mexico, Brazil, China, Korea, India and Malaysia. The company plans to wind down its operations in certain other markets and shift to a “digital-first, technology-led and asset-light” business model after emerging from bankruptcy, Tupperware CEO Laurie Ann Goldman said in a statement last week.
Financial trouble for Tupperware
Financial troubles piled up in the meantime. In September’s bankruptcy petition, Tupperware reported more than $1.2 billion in debts and $679.5 million in assets.
“This is a situation that was in urgent need of a vast global resolution,” Spencer Winters, an attorney representing Tupperware, said during a U.S. Bankruptcy Court hearing Tuesday. Winters called the sale agreement a “great outcome” that he said preserves Tupperware’s business, customer relationships and jobs.
The sale agreements calls for Tupperware to become a privately held company under supportive ownership of the purchasing lender group, which includes hedge fund managers Stonehill Capital Management and Alden Global Capital.
Other closing conditions that must be met before the transaction is completed include an issue with a Swiss entity that still needs to be resolved, according to statements made in court Tuesday.
Tupperware faced issues with sale to lender
The Orlando, Florida-based company filed for Chapter 11 protection last month, seeking to auction its assets on the open market.
But Tupperware’s lenders opposed the company’s sale plans, preferring to claim the assets for themselves. The lenders cut off the company’s access to cash early in the bankruptcy, before the two sides agreed to a deal.
