As reported earlier today by Reuters and CLN Online, lenders holding over $208 million in debt owed by Wilton Holdings, the parent company of Wilton Brands, filed a petition this morning in federal bankruptcy court to force Wilton Holdings into Chapter 11 bankruptcy reorganization.
Wilton Holdings is the parent company of Wilton Brands, which includes the brands EK Success, K&Co, Dimensions, and Wilton. Wilton Holdings is owned by private equity firm GTCR, Golder Rauner, LLC.
The involuntary bankruptcy petition was reported by Reuters as being filed by JGF Credit LLC, which stated it had recently acquired $104.3 million in unsecured debt owed by the company. The petition was also joined by Deutsche Bank Trust Co. Americas of New York, which is the administrative agent for the lenders who are owed an additional $104.3 million of the company’s debt.
In response to media requests for comment, Wilton Brands issued the following statement:
We are aware of recent reports that Wilton is going into chapter 11 restructuring. Here are the facts.
First, and most importantly, Wilton Brands Inc. is not in chapter 11. Further, it has not been petitioned into chapter 11 nor have any of the other operating companies that market and sell our products.
As a result of certain breaches of our loan covenants that have been previously disclosed, creditors of the parent company of Wilton Brands Inc. filed an involuntary petition against that holding company (Wilton Holdings, Inc.). While that company bears the Wilton name, the petition was not filed against any of the operating companies and does not affect their day-to-day operations.
The company’s owners and lenders are working diligently to resolve this matter. Management is monitoring these discussions and our primary focus remains on running our business as usual.
The company’s operating results are solid in spite of the challenging economic environment. Operating income is ahead of last year’s strong results, partially due to the achievement of our cost savings initiatives. Wilton Brands Inc. will continue to conduct its business in the ordinary course and will continue to honor its obligations. We value our relationships with all of our customers and suppliers and look forward to continued growth together.
None of the Wilton brands are exhibiting at CHA-Summer. (EK Success is listed in the exhibitor directory but that listing was placed by a distributor, not by the company itself.) EK Success has released sneak peeks of new products.
Wilton Brands was formed in August 2007 when EK Success, already owned by GTCR, Golder Rauner, LLC., purchased Wilton Industries and Dimensions Holdings. Earlier in 2007, EK Success had launched the Martha Stewart Crafts line in stores. EK Success was founded in 1978, and purchased in 2006 by GTCR, Golder Rauner, LLC. K & Company was formed in 1996.