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Performance Sports Group Chapter 11 Bankruptcy

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Performance Sports Group (f/k/a Bauer Performance Sports) and more than 15 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 16-12373 (BPS US Holdings). The Company, which designs, manufactures and distributes performance sports equipment, related apparel and accessories, is represented by Pauline K. Morgan of Young Conaway Stargatt & Taylor.

The Company concurrently announced that this filing was made in order to facilitate a financial and corporate restructuring through a going-concern sale of substantially all of the Company’s assets. The Company has also commenced proceedings under the Companies’ Creditors Arrangement Act (CCAA) in the Ontario Superior Court of Justice.

In connection with the restructuring process, the Company has entered into an asset purchase agreement with an acquisition vehicle to be co-owned by an affiliate of Sagard Capital Partners and Fairfax Financial Holdings Limited (collectively, the “Purchaser”), pursuant to which the Purchaser has agreed to acquire substantially all of the assets of the Company and its North American subsidiaries for $575 million in aggregate, assume related operating liabilities and serve as a stalking horse bidder through the restructuring process.┬áThe purchase agreement sets the floor, or minimum acceptable bid, for an auction under the supervision of the Courts, which is designed to achieve the highest available or otherwise best offer.

To provide working capital for the Company’s operations and to fund the auction and sales process, the Company’s existing asset-based lenders and the Purchaser have committed to provide the Company with an aggregate of $386 million in debtor-in-possession financing. Subject to Court approval, $25 million of the D.I.P. financing is available to the Company immediately, with the balance of the financing to be available upon final Courts’ approval. The Company will use the D.I.P. financing, once approved by the Courts, to, among other things, refinance its term loan credit agreement, dated as of April 15, 2014, as amended and fund day-to-day operations in the ordinary course of business.

Bernard McDonell, chairman of Performance Sports Group, comments, “In light of our inability to file our annual audited financial statements and the resulting default under our secured loan agreements, we believe that today’s action is the responsible course to take for Performance Sports Group to address its financial, legal and regulatory challenges under supervision of the courts.”

Read more PSG bankruptcy news.