Bauer Hockey Needs Two Judges to Referee Bankruptcy AuctionBy
Courts in U.S., Canada to weigh Performance Sports sale rules
Shareholders accuse company of rushing sale, discouraging bids
Bauer Hockey and Easton Baseball will need two bankruptcy judges, one in Canada and one in the U.S., to referee a fight among shareholders over how the sporting goods makers should be sold at a court-ordered auction.
The companies, makers of skates, bats and other equipment used by pros and amateurs, are owned by Performance Sports Group Ltd., whose shareholders can’t agree on how to organize a sale. Lawyers will appear before judges in Toronto and Wilmington, Delaware, on Nov. 30 in a video-linked court hearing to sort out auction procedures.
Performance and the Bauer and Easton units filed for creditor protection in the U.S. and Canada last month because the companies have assets in both countries. In a phone conference Wednesday, the judges said they were concerned Exeter, New Hampshire-based Performance Sports wasn’t giving them enough time to rule. Under deadlines imposed by the company’s lenders and the lead bidder for its assets, auction rules must be approved by Nov. 30.
U.S. Bankruptcy Judge Kevin Carey told his Canadian counterpart, Ontario Superior Court Judge Frank Newbould, that he expects them to “have an opportunity to consult with each other privately so hopefully we can come to consistent rulings.”
Sagard Capital Partners, Performance Sports’ biggest shareholder, and Fairfax Financial Holdings Ltd. have made a binding opening offer of $575 million in the court-supervised auction. That so-called stalking-horse bid includes a $20 million breakup fee if the assets go to another buyer.
Other shareholders have objected, saying the company is rushing the sale and not giving them and some creditors enough time to investigate potential conflicts of interest among Performance Sports’ board members. Those shareholders also say the proposed bidding rules may be designed to scare off competing offers.
“The stalking horse bid is an attempt to acquire all of the debtors’ equity at a fraction of the market (and analyst consensus) pricing,” a committee of shareholders, represented by the law firm Brown Rudnick LLP, said in court papers.
Performance Sports will seek to resolve those objections before the Nov. 30 hearing, company attorney Pauline Morgan said during Wednesday’s conference. Failing that, the company will file a written response with the court on Nov. 28.
Bauer is the top seller of ice hockey equipment in the world, with 56 percent of the market, Performance Sports has said in court papers, while Easton has 19 percent of the North American market for baseball- and softball-related sales. The company has been struggling with a slowdown in sales, particularly in bats, and saw the liquidation of key customer Sports Authority Inc. earlier this year.
The case is In re BPS U.S. Holdings Inc., 16-12373, U.S. Bankruptcy Court, District of Delaware (Wilmington).