Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
School Supply Distributor Seeks Chapter 11 Bankruptcy Protection
Author: Joel R. Glucksman
Date: February 12, 2013
Key Contacts
Back
School Specialty Inc., a distributor of educational supplies to grade schools, has filed for Chapter 11 protection under bankruptcy law.
The Wisconsin-based company sought protection in U.S. Bankruptcy Court in Delaware, and listed $494.5 million in assets and $394.5 million in liabilities. Following the bankruptcy filing, and an announcement that the assets would be auctioned off, company shares fell by roughly 80 percent. Despite the company’s precarious financial position, School Specialty said it has already been authorized to receive up to $175 million in loans from the company’s board to carry it through the bankruptcy process. Bayside Capital Inc. has been appointed as the “stalking horse” bidder for the auction, and has agreed to provide $50 million in debtor-in-possession financing to School Specialty.
In a statement, School Specialty president and CEO Michael Lavelle said the company hopes to emerge from the bankruptcy proceedings within 90 days and will continue operations during the restructuring process.
“We are pleased to have reached these agreements with Bayside, and are confident School Specialty’s business has a bright future,” said Lavelle. “We fully expect to continue normal business operations, providing quality, value-driven education products and excellent customer care. Our customers remain a top priority and we plan to meet all our customer commitments and maintain customer policies and programs.”
Although the company declined to comment on the precise cause of its financial troubles, a Reuters analysis noted that school supply markets are seasonal, which can lead to fluctuations in revenue and earnings. In addition, the schools the company supplies are heavily dependent on state and local funding, which has dried up considerably since the recession. Budget cuts have rendered many schools unable to adopt new curriculum guidelines, and as a result, they have stopped spending money on new instructional materials to meet these guidelines.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
How to Effectively Use Contracts to Manage Risk
Key provisions in your contracts, including those relating to indemnification, insurance, and defense, are essential to contract risk management. While sometimes considered “boilerplate,” these provisions play a pivotal role when determining which party is responsible for certain costs and liabilities. They must always be negotiated and drafted carefully. Indemnification Clauses Businesses should never overlook the […]
Author: George McGowan
Understanding Portability for Estate and Gift Tax
Portability of estate and gift tax enables a surviving spouse to inherit any unused portion of their deceased spouse’s federal estate and gift tax exemption. So, if one spouse doesn’t utilize their full exemption, the surviving spouse can effectively double their exemption amount with regard to estate tax liability. For married couples, portability offers a […]
Author: Marc J. Comer
Pet Trusts in New Jersey and New York: A Practical Estate Planning Tool
For many of us, pets are more than companions—they are members of the family. Yet they are often overlooked or inadequately provided for when it comes to estate planning. A pet trust offers a legally enforceable way to ensure that your animal continues to receive proper care if you become incapacitated or pass away. As […]
Author: Marc J. Comer
How Can Trusts Be Used in Business Succession?
For many New Jersey business owners, a closely held company represents decades of work, financial investment, and personal sacrifice. Trusts in business succession planning are one of the most effective tools for protecting that value, allowing founders to control how and when the business passes to the next generation while reducing the risk of disputes, […]
Author: George McGowan
Read Before You Sign: IT Contract Pitfalls Every NJ Business Should Know
In today’s digital economy, New Jersey businesses of all sizes rely heavily on technology vendors, software providers, cloud platforms, and managed IT services. Whether your company is purchasing software, migrating data to the cloud, engaging a cybersecurity consultant, or entering into a long-term managed services agreement, a careful IT contract review can have significant operational, […]
Author: George McGowan
New York NDA Requirements for Businesses
Non-disclosure agreements (NDAs) remain a critical tool for protecting sensitive business information. However, New York NDA requirements have evolved, and businesses must ensure these agreements are carefully drafted to remain enforceable. In a competitive market like New York City, NDAs are commonly used to protect proprietary information, client relationships, and strategic plans. At the same […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.