Schutt Sports Files Bankruptcy, Seeks Bar to Riddell Patent Suit Damages

Schutt Sports Inc., the Illinois football-helmet maker, filed for bankruptcy and sued competitor Riddell Inc. seeking an order to block collection of a $29 million patent lawsuit verdict.

Schutt and affiliates yesterday filed Chapter 11 bankruptcy papers in Wilmington, Delaware. They listed both assets and debt of $50 million to $100 million. Schutt also sued Riddell, asking the bankruptcy court to bar collection of the damages in the patent suit, and to block the trial court’s order not to sell helmets involved in the case.

A federal court jury in Madison, Wisconsin, found last month that Schutt’s DNA and ION football helmets infringed Riddell inventions and awarded Riddell the damages, Riddell said in a statement at the time.

“The debtors are faced with a softer demand for their products due to cutbacks in school budgets and, at the same time, operate under an over-leveraged capital structure,” Rollen Jones, Schutt’s chief financial officer, said in court papers.

Schutt also faces the $29 million verdict “and continued litigation attacks from Riddell,” Jones said.

“The company is exploring strategic options to maintain long-term health, including selling some or all of the businesses or raising additional equity,” Schutt said in a statement today.

Schutt, based in Litchfield, Illinois, is the world’s No. 1 maker of football helmets, the closely held company says on its website. Riddell, an affiliate of Easton-Bell Sports Inc., said it is the official helmet provider for the National Football League.

Industry Leader

“Riddell is the industry leader in football helmet safety and we have invested millions of dollars in technology and helmet design innovation,” Dan Arment, the company’s president, said after the verdict.

“As a matter of policy, Riddell does not comment on ongoing litigation,” Joel Curran, a Riddell spokesman, said in an e-mailed message.

The bankruptcy case is In re Schutt Sports Inc., 1:10-bk- 12795, and the Riddell suit is Schutt Sports Inc. v. Riddell Inc., 1:10-ap-52995, U.S. Bankruptcy Court, District of Delaware (Wilmington). The patent case is Riddell Inc. v. Schutt Sports Inc., 3:08-cv-00711, U.S. District Court, Western District of Wisconsin (Madison)

To contact the reporters on this story: Dawn McCarty in Wilmington, Delaware, At dmccarty@bloomberg.net; Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.