Oreck Corp. files for Chapter 11 Bankruptcy
Oreck Corp. filed for Chapter 11 Bankruptcy protection on May 6, 2013 in the United States Bankruptcy Court for the Middle District of Tennessee. The lead case No. is 13-04006, the associated cases are within case Nos. 13-04008 through 13-04017. The case is pending before the Honorable Keith M. Lundin. The Debtor in Possession is represented by Bradley Arant Bouldt Cumming, LLP (Alexandra Dugan legal counsel). The DIP has requested to employ BMC Group as Claims Agent.
[download_link link=”http://chapter11dallas.com/wp-content/uploads/2013/05/Oreck-Voluntary-Petition-5-6-13.pdf” variation=”white”]Voluntary Petition[/download_link]
Motion to Sell
[image_frame style=”reflect_shadow” align=”right”]http://chapter11dallas.com/wp-content/uploads/2013/05/oreckvacuum_320x245.jpg[/image_frame]
On May 16, 2013, the Debtor filed its motion to sell substantially all of its assets to Oreck Acquisition Holdings LLC for approximately $12.8 million consisting of $14.5 million in cash and the assumption of certain liabilities. The stated result of the sale will be the continuation of the business and returning it to be an Oreck family managed business. Currently the Oreck family has only nominal ownership of the Debtors and has not controlled any of the Debts’ previous operations for many years other than the Tom Oreck, who has acted as a paid spokesperson for the Debtors on QVC and owned 16 retail stores. David Oreck owns a warehouse leased to the Debtors. The Court set the hearing on the bid procedures for May 21, 2013 at 9:00 a.m. (Courtroom 2 2nd Floor Customs House 701 Broadway Nashville TN 37203)
[download_link link=”http://chapter11dallas.com/wp-content/uploads/2013/05/Oreck-Motion-to-Sell-Assets.pdf” variation=”white”]Motion to Sell[/download_link]
According to the company’s website:
The Oreck Corporation, a manufacturer and marketer of some of America’s best-known cleaning and air purification products is consolidating its assets and restructuring its financing under Chapter 11 of the bankruptcy code in order to accommodate a sale as an ongoing business. The move will enable Oreck to sell the business while continuing day to day operations without interruption.
Oreck will continue to operate in the ordinary course of business while the sale process takes place, with authorized and exclusive dealers and other trade customers continuing to receive product for sale to ultimate consumers. It is anticipated that following the closing of the sale that plant operations and corporate headquarters will remain in Tennessee.
Chapter 11 is a business reorganization proceeding under the federal bankruptcy law that allows a company to remain in control of its assets and operations while it seeks to reorganize or sell its assets. The process is under the supervision of a bankruptcy judge sitting in Nashville, but the company is authorized to continue its ordinary course of business without intervention by the court.
Headquartered in Nashville, Tenn., Oreck Corporation is a leading manufacturer in the homecare industry, offering a variety of vacuum, air purification and other cleaning products. Oreck sells its products in hundreds of Oreck Clean Home Centers, as well as through phone and online direct sales. The company distributes products in the U.S., Canada and parts of Europe.
Oreck was founded in 1963 by David Oreck shortly after he left electronics company RCA. The company was originally a vacuum manufacturer for U.S. hotels, and Oreck claims today that more than 50,000 hotels around the world use its vacuum cleaners. The machines gained popularity among hotels for their light weight.
Oreck’s former CEO Doug Cahill said he left in March after making several unsuccessful attempts to buy the company from its owner, Black Diamond Capital Management. Cahill said he felt the firm wasn’t supportive of the strategy he wanted to pursue. “I didn’t like the direction they were taking or how they were dealing with us,” Cahill said, “so I resigned.” He said he was disappointed by what was happening. “It’s hard to believe a 50-year-old company can be in this bad of shape in 50 days,” he said.
More about purchasing assets at a 363 sale