True Temper Sports, Inc. (“True Temper Sports”) and its 2 affiliates who also filed bankruptcy on October 8, 2009 (the “Debtors”) have requested authority make substantial payments of pre-petition claims of suppliers and other vendors. The Debtors have also stated that under the proposed prepackaged plan of reorganization sufficient cash will be available to pay prepetition supplier and other vendor claims in full. This post discusses this treatment of trade debt and provides the names of the creditors and potential claim amounts on the Debtor’s consolidated list of the 30 largest unsecured creditors (the “Top Unsecured Creditor List”).
Vendor Trade Debt Picture
The total claims of the 30 top unsecured creditors is substantial, exceeding $127 million. However, the amount of vendor debt on the list appears only to be approximately $2 million. Beyond this limited information, the initial filings do not provide any substantial information about the overall vendor trade debt of the Debtors. What is clear from the initial filings is the intention of the Debtors to minimize or even eliminate any adverse impact of the bankruptcy on the Debtor’s suppliers and other vendors.
The Debtors have filed a motion for authority to pay the pre-petition claims of vendors identified as either “Critical Vendors” or “Priority Vendors” by the Debtors. Pursuant to this motion the Debtors seek authority, in their discretion, to pay the prepetition claims of Critical Vendors in an aggregate amount not to exceed $1.5 million and an additional amount of up to $300,000 for payment of pre-petition claims qualifying for administrative expense treatment – i.e. 503(b)(9) claims. The Debtors would be authorized, but not required, to start payments under this motion as soon as an order granting the motion is entered by the bankruptcy court.
Additionally, the Debtors filed, concurrently with their petitions, a “Joint Prepackaged Plan of Reorganization” (the “Plan”). The Plan provides, among other things for the creation of a “Trade Account” of up to $3,000,000 (but not less than $500,000) on account of its for distribution to “Allowed Trade Unsecured Claims”. The Debtors state that they believe that sufficient cash will be available to pay prepetition supplier and other vendor claims in full
Listing of 30 Top Unsecured Claimants
The Debtors have listed the following creditors as being their top 30 largest unsecured creditors. The following list also does not include any creditor contact information that may have been included by the Debtors.
|Name of creditor||Nature of claim||Claim is contingent, unliquidated, disputed, or subject to setoff||Amount of claim|
|The Bank of New York, as Trustee||8.375% Unsecured Notes Due 2011||$125,000,000.00|
|Newport Composite||Trade Payable||$444,550.38|
|U-Known Composite Limited||Trade Payable||$407,517.28|
|Steel Technologies, Inc.||Trade Payable||$383,632.66|
|Steel Warehouse Co. Inc.||Trade Payable||$241,584.50|
|City of Amory Utilities||Utility Payable||$205,000.00|
|Atmos Energy||Utility Payable||$185,000.00|
|Atotech USA Inc.||Trade Payable||$133,404.56|
|Lann Chemical & Supply||Trade Payable||$37,903.12|
|Tenn-Tom Pallet Co. Inc.||Trade Payable||$37,258.20|
|Century Chemical||Trade Payable||$33,396.71|
|Cast Urethane Products, Inc.||Trade Payable||$25,343.71|
|Toray Composite America||Trade Payable||$22,895.07|
|Reed Exhibitions||Trade Payable||$21,000.00|
|Fuchs Lubricants||Trade Payable||$19,679.52|
|Hoerner Boxes, Inc.||Trade Payable||$19,379.12|
|Awot Global||Trade Payable||$18,658.60|
|George A. Mitchell Company||Trade Payable||$18,079.00|
|Turnstile Publishing||Trade Payable||$17,000.00|
|Keyence Corp. of America||Trade Payable||$16,160.00|
|ALG labels & Graphic Corp.||Trade Payable||$15,762.71|
|Perfection Servo Hydraulics, Inc.||Trade Payable||$14,525.00|
|White Oil Co., & Tire Center Inc.||Trade Payable||$13,891.49|
|Harcros Chemicals Inc.||Trade Payable||$13,352.20|
|Meng & Associates, Inc.||Trade Payable||$13,140.00|
|Tiger Direct||Trade Payable||$13,094.61|
|Springfield Label & Tape Co.||Trade Payable||$12,793.57|
|Waste Management Inc.||Utility Payable||$12,488.00|
|Pension Benefit Guaranty Corporation (PBGC)||Underfunded Pension Liability||Contingent, Unliquidated||Unknown|
The Top 30 List does not include: (1) persons who come within the definition of “insider”; or (2) secured creditors, unless the value of the collateral is such that the unsecured deficiency places the creditor among the holders of the largest unsecured claims. The Top Unsecured Creditor List is based on the Debtors’ books and records as of October 7, 2009.
Bankruptcy Rule 1007(d) provides that a debtor shall file “a list containing the name, address and claim of the creditors that hold the 20 largest unsecured claims, excluding insiders.” Fed. R. Bankr. P. 1007(d). In the case of a multi-debtor filing, it is likely that many creditors are shared among certain of the debtors. This is especially the case where the debtors operate as a single business enterprise. Under these circumstances and provided that there is a request for joint administration, it is common for multiple, related debtors to request authority to file a single, consolidated list of their collective largest general unsecured creditors. These requests usually are granted by the bankruptcy court.
The Top Unsecured Creditor List is never to be considered a waiver of any defense to or “allowability” of a listed claim or an admission of the amount of any listed claim. It is common for the amount of the claims to shift and sometimes a claim that is initially is undisputed is later disputed. Creditors should always consult the official claims register.