School Specialty, Delta Education File for BankruptcyPhil Milford
School Specialty Inc., a money-losing distributor of non-textbook school supplies including art materials and classroom equipment, filed for bankruptcy protection and put the company on the auction block.
School Specialty, based in Greenville, Wisconsin, listed $494.5 million in assets and $394.5 million in debt in Chapter 11 papers filed today in U.S. Bankruptcy Court in Wilmington, Delaware.
“We fully expect to continue normal business operations, providing quality, value-driven education products and excellent customer care and programs,” the company’s chief executive officer, Michael P. Lavelle, said in a statement.
The company has signed an asset purchase agreement with Bayside Capital Inc. for a proposed sale with competitive bidding supervised by the court, and Bayside will provide a $50 million loan, according to the statement.
The board has authorized company officials to borrow as much as $175 million to carry it through the bankruptcy process, according to court papers.
Among the company’s largest unsecured creditors listed in the petition are trustee Bank of New York Mellon Corp., with a $157.5 million claim for 3.75 percent bonds due in 2026, and Crayola LLC, owed $4.26 million.
School Specialty reported a net loss of $134 million for fiscal year 2012 ended April 28, according to data compiled by Bloomberg. Its shares fell 73 percent to 16 cents in trading today in New York. The stock traded as high as $3.90 last March 19.
The case is School Specialty Inc., 13-10125, U.S. Bankruptcy Court, District of Delaware (Wilmington).