The Rockport Co. has filed Chapter 11 bankruptcy in a U.S. District Court in Delaware and intends to file a motion seeking authorization to pursue an auction and sale process under Section 363 of the U.S. Bankruptcy Code. The proposed bidding procedures, if approved by the court, would require interested parties to submit binding offers to acquire Rockport’s assets.
The company’s CEO, Gregg Ribatt, has resigned but will make himself available for a transitional period. Joseph Marchese of PKF Clear Thinking was appointed on May 1, 2023 as chief restructuring officer of Rockport.
The company said in a statement that “many employees of Rockport are expected to continue with the company and assist Mr. Marchese and independent advisors and professionals in Rockport’s operations during the Chapter 11 proceedings.”
“The immediate relief of Chapter 11 is appropriate to provide the company the opportunity to assess the situation and develop a process to maximize value recoveries for all stakeholders,” said Marchese in a release. “Rockport has valuable assets that can be effectively administered in an organized joint process. I want to assure every employee, customer, creditor, contract party, investor and other stakeholders that we are going to conduct this effort with diligence, thoroughness and transparency.”
The company said it currently anticipates operating “business as usual” during the Chapter 11 process and customers should see no disruption in service or product quality. Subject to court approval, Rockport will operate utilizing debtor-in-possession (DIP) financing, which will provide Rockport with sufficient liquidity to continue its operations during the Chapter 11 case and related sale process.
However, in a notice filed with the Massachusetts Executive Office of Labor and Workforce Development on May 9, the company indicated that it anticipates that staff separations may occur between July 8 and July 22, 2023, with 148 employees potentially affected by the action.
In anticipation of the Chapter 11 sales process, Rockport has entered into negotiations with a potential purchaser, who has significant experience in the industry, to serve as a stalking horse bidder.
Potter Anderson & Corroon LLP is serving as legal advisors to the Company in connection with the Chapter 11 proceedings. Stifel, Nicolaus & Co., Inc. and its affiliate Miller Buckfire & Co., LLC are serving as Rockport’s investment banker and PKF Clear Thinking as its restructuring advisor.
In its filing the company estimated its assets in the $50 million to $100 million range and liabilities in the same range.
In the filing obtained by SGB Executive, the company listed its top five creditors as:
- Stella Intl Trading, China $24.1 million
- Maersk Warehousing, CA $10.9 million
- East Mount Shoes, China $6.9 million
- Farida Shoes, India $2.6 million
- Aston Shoes, India $2.6 million
The company listed its subsidiaries, CB Marathon Midco, LLC, Rockport IP Holdings, LLC, Rockport UK Holdings Ltd. and CB Footwear Services, LLC, as debtors in the filing. All entities are located at the same address in West Newton, MA. No other entities own more than 10 percent of the company.
- Debtor The Rockport Company, LLC is 100 percent owned by Debtor CB Marathon Midco, LLC.
- Debtor Rockport IP Holdings, LLC is 100 percent owned by Debtor CB Marathon Midco, LLC.
- Debtor CB Marathon Midco, LLC is 100 percent owned by CB Marathon Holdings, LLC.
- Debtor CB Footwear Services, LLC is 100 percent owned by CB Marathon Holdings, LLC.
- Debtor Rockport UK Holdings Ltd. is 100 percent owned by Debtor The Rockport Company, LLC.
Each of the entities above have filed a petition in the United States Bankruptcy Court for the District of Delaware for relief under chapter 11 of title 11 of the United States Code. The Debtors have moved for joint administration of these cases under the case number assigned to the chapter 11 case of The Rockport Company, LLC.
The Rockport Company, LLC is a single member LLC with CB Marathon Midco, LLC listed as a solo member and Timothy R. Pohl as the signing member of that LLC.
Photo courtesy Rockport
