School Specialty files for Chapter 11 Bankruptcy

theflyonthewall.com

School Specialty announced that it has entered into an asset purchase agreement with an affiliate of Bayside Capital, under which School Specialty proposes to sell its assets as a going concern through a court-supervised sale process. To facilitate the sale transaction, School Specialty and certain of its subsidiaries today filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware and is pursuing the sale process under Section 363 of the Bankruptcy Code. In connection with the filing, the company has secured a new lending arrangement to be provided by School Specialty's existing asset-based lenders and a commitment for $50M in additional capital in the form of debtor-in-possession financing from an affiliate of Bayside Capital. This financing is intended to provide School Specialty with ample liquidity to operate the business and meet its ongoing obligations to customers, business partners, suppliers and employees through completion of the sale process. The announcement will enable a sale of the business on an expedited basis to Bayside Capital or any higher or better bidder approved by the Court, and its emergence as owned by a financially stronger entity. The company anticipates completing the sale process in approximately 60-90 days.

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