US-based slip-resistant footwear producer Shoes For Crews has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of Delaware.
The move facilitates a sale that will allow the company to continue operations and invest in global market growth.
The company has the unanimous backing of its primary and secondary lenders as well as its equity sponsor, CCMP, for the restructuring.
Shoes For Crews plans to divest the business by signing a stalking horse asset purchase agreement with its first lien-secured lenders. This is to ensure its ongoing operation under new ownership.
The company is also initiating a court-supervised sale process to secure the highest or best bid for its assets, aiming to maximise stakeholder value.
The divesture is expected to conclude by the end of May 2024
Shoes For Crews has also arranged to receive $30m in debtor-in-possession financing, subject to court approval, to maintain normal operations during the Chapter 11 process.
This financing, along with operational cash flow, is anticipated to provide sufficient liquidity to support business activities and ensure uninterrupted manufacturing and distribution.
Shoes For Crews president and chief executive officer Donald Watros said: “Today’s announcement marks an important step forward for Shoes For Crews that will position us financially to continue investing in our industry-leading products and delivering for our valued customers well into the future.
“We are confident that with a stronger balance sheet and the strong support of new ownership, Shoes For Crews will be on track to continue in our mission of creating a safer workplace by continuing to develop and provide the leading slip-resistant footwear to bring every employee home safely.”
The company has also filed standard “first-day” motions to continue supporting its workforce and customer programmes during the sale process.
These motions will ensure the payment of employee wages and benefits and the maintenance of customer programmes.
The process will not affect the operations of its international entities in Canada, Europe, the Pacific and Asia.
