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
What Business Owners Get Wrong Before Meeting a Litigation Attorney
What should you expect when meeting a litigation attorney about a business dispute? You should expect to describe the dispute in your own words, hand over the most important documents, flag any deadlines or immediate threats, and leave with a clearer picture of the problem, what information is still needed, and the likely next steps. […]
Author: Michael Mietlicki
Arbitration vs. Litigation vs. Mediation: What New Jersey Businesses Should Know Before Signing a Contract
Arbitration resolves disputes privately before an arbitrator whose decision is usually final, while litigation resolves them in court with full rights of appeal. Whether a business ends up in arbitration or litigation is often decided when it signs the contract, long before any dispute arises. Key Takeaways When facing a contract dispute, carefully consider your […]
Author: Graham Staton
Can You Own Part of a New Jersey Business Without a Written Agreement?
Can you own part of a business in New Jersey without a written agreement? Yes, it is possible. Under New Jersey’s Uniform Partnership Act, a partnership can arise when two or more people carry on a business as co-owners for profit, whether or not they ever intended to form one. Ownership doesn’t necessarily depend on […]
Author: Michael Mietlicki
Crisis-Proofing Your New Jersey Business: Building a Crisis Response Plan Before You Need One
For New Jersey businesses, crisis preparedness should be viewed as a legal and operational function, not simply an emergency-management exercise. A well-designed crisis response plan can help preserve evidence, protect confidential communications, meet reporting obligations, limit unnecessary exposure, and prevent an already difficult situation from becoming a larger legal problem. Key Takeaways A serious crisis […]
Author: Sean M. Pena
Monmouth County's Next Development Wave: What Developers and Investors Need to Know
Monmouth County is entering a significant new phase of development. For those looking to acquire property or undertake a new project, understanding the market opportunity is only the beginning. The more important question is whether a particular property can actually be developed as contemplated and what approvals, agreements, and other conditions will be required to […]
Author: Donald M. Pepe
Are Your Conversations with AI Shielded from Discovery? Courts Are Split
Whether a client’s prompts to a generative AI tool and the documents it produces are protected from disclosure depends on the case type, who claims protection, and whether counsel was involved. In United States v. Heppner, a New York federal judge ruled that a criminal defendant’s communications with an AI platform were protected by neither […]
Author: Chris Seelinger
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.