Performance Sports Files for Chapter 11 Bankruptcy

by San Antonio Attorney

The manufacturer of Easton baseball gears and Bauer hockey equipments filed for Chapter 11 bankruptcy on Oct.  31 following a scrutiny of its accounting, slump on baseball bat sales and liquidation of Sports Authority.

Performance Sports Group, which is headquartered in Exeter, New Hampshire, announced on the day of its filing that it sought for protection from its creditors and by means of a similar procedure in Canada.

Performance Sports received a $575 million stalking horse bid for its assets.  The bidder was a subsidiary of Sagard Capital Partners and Fairfax Financial.

The sports equipment maker also obtained $386 million in bankruptcy financing to fund its operation and pay workers.

Any loan or sale is still subject to the approval of a bankruptcy judge.

In a statement released by Chief Executive Officer Harlan Kent, he said the deal with Sagard and Fairfax shows their confidence in the company’s future.  He also said a bankruptcy sale is the best option for all the stakeholders of Performance Sports.

The company filed for bankruptcy within four months after deciding to hire an independent lawyer to conduct a formal inquiry to the completion of its financial statements and necessary certification procedure.  Lenders of the company had granted an extension on submitting those documents until Oct.  28, but they missed the closing date.

The company blamed a major slump in retail sales in all of its product categories, especially in the bat category, and also the bankruptcy filings of Sports Authority and other big clients.

According to reports, the rates of baseball participation among youth have dropped in the past few years.

The sports gear maker also mentioned the unfavorable conditions of economy, client credit problems and currency rates as factors of its financial troubles.

When the company filed for Chapter 11 bankruptcy, it had $608 million in debts and $594 million in assets.

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