(Corrects estimated recovery for unsecured creditors in third paragraph of story published July 27.)
July 27 (Bloomberg) -- Prince Sports Inc., a pioneer of the modern oversized tennis rackets, won court approval of its restructuring plan giving ownership of the company to lenders.
U.S. Bankruptcy Judge Kevin J. Carey at a hearing today in Wilmington, Delaware, gave the racket-maker approval of the plan, allowing it to exit court protection in less than three months, according to court documents.
Under Prince’s reorganization plan, lender ABG-Prince LLC will get all the reorganized company’s equity in exchange for its $67.2 million secured debt. Unsecured creditors, owed about $13.8 million if all claims are allowed, will get proceeds from lawsuits and $4 million cash in two installments for an estimated recovery of at least 29 percent.
James E. O’Neill, a lawyer representing the company, didn’t immediately return a phone call or e-mail seeking comment on the plan’s approval.
Prince, whose rackets were used by champions including Maria Sharapova, Jimmy Connors and Martina Navratilova, was founded in 1970 when Bob McClure invented the “Little Prince,” the first ball machine for home court use, in his garage in Princeton, New Jersey.
In December 2010, Sharapova ended her 10-year sponsorship agreement with Prince. The Russian player, who won three of her four major titles with the company’s rackets, switched to Head NV a year later.
In 1976, the company revolutionized the sport by inventing the first oversize racket. The “Prince Classic” measured 110 square inches, had a much bigger “sweet spot” than traditional wooden rackets and became one of the best-selling rackets of all time.
In 1977, Prince produced the first graphite racket, which is still being used by professionals including doubles major champions Mike Bryan and Bob Bryan of the U.S. and former world No. 1 Jelena Jankovic of Serbia.
Declining demand “combined with increased competition over the past five years” and a drop in “consumer discretionary spending” caused the Bordentown, New Jersey-based company to seek bankruptcy protection, said Gordon Boggis, chief executive officer, in court papers.
For the fiscal year 2011 the tennis segment of the business, which includes racquets, balls, bags and footwear, generated 83 percent of Prince’s revenue, according to court documents. The company’s squash, racquetball and platform tennis divisions made up the remaining 17 percent of sales.
Prince sought bankruptcy protection May 1 listing about $54.2 million in assets as of Dec. 31, court filings show. The company owed creditors more than $75 million.
The case is In re Prince Sports Inc., 12-11439, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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