Huffy Corp. Emerges from Chapter 11…

October 17, 2005
SGB Update

Huffy Corporation has emerged from the Chapter 11 reorganization process after almost 11 months under the court’s protection. The company officially concluded the reorganization process after completing all required actions and satisfying all remaining conditions in its Plan of Reorganization. This was confirmed by the U.S. Bankruptcy Court for the Southern District of Ohio on September 23, 2005.

The court did set forth several conditions before Huffy could emerge, one of which was adequate exit financing. The company completed this final requirement late last week with a $40 million revolving loan facility provided by a syndicate led by Wachovia Capital Finance Corporation and Wachovia Capital Markets and a $10 million term loan from Patriarch Partners. The revolving loan facility is secured by inventory and accounts receivable and a second priority lien on the company's intellectual property and other assets. The term loan is secured by the company's intellectual property and a second priority lien on its inventory and accounts receivable.

Under the plan, all previously outstanding shares of Huffy common stock are cancelled as of October 14, 2005. New shares of common stock are being issued to certain creditors of the company in accordance with the plan. The company will have less than 300 shareholders and its shares will no longer be publicly traded. It will no longer be required to file periodic reports with the SEC.

As reported earlier (SEW_0527), under the agreement, the China Export & Credit Insurance Corporation – a Chinese government-owned export credit insurance company, will receive 30% of Huffy’s new voting common equity in the form of new Class A shares and a $3 million note. The Class A common shares entitle the China Export & Credit Insurance Corporation to elect the majority of Huffy’s board of directors.

In addition to John A. Muskovich, Huffy’s president and CEO, the new Board now includes Michael Buenzow – senior managing director of FTI Palladium Partners, Kenny Chou – CEO of Shenzhen BoAn Bike Co., Douglas Gernert – president and CEO of totes>>ISOTONER Corporation, Raymond Kintzley – president of Ramiko, and Barry Metzger partner in Baker & McKenzie LLP. Zhidong Liang, EVP of China Export & Credit Insurance Corporation, will be the Board’s chair.

In addition to this control over the board, the China Export & Credit Insurance Corporation will have the ability to earn up to 51% of the aggregate new common voting stock over the next 5 years. Seventy percent of the new common equity in the form of new Class B shares and a $9 million note will be issued to the other unsecured creditors.

Huffy Corp. Emerges from Chapter 11…

SGB Update

Huffy Corporation has emerged from the Chapter 11 reorganization process after almost 11 months under the court’s protection. The company officially concluded the reorganization process after completing all required actions and satisfying all remaining conditions in its Plan of Reorganization. This was confirmed by the U.S. Bankruptcy Court for the Southern District of Ohio on September 23, 2005.

The court did set forth several conditions before Huffy could emerge, one of which was adequate exit financing. The company completed this final requirement late last week with a $40 million revolving loan facility provided by a syndicate led by Wachovia Capital Finance Corporation and Wachovia Capital Markets and a $10 million term loan from Patriarch Partners. The revolving loan facility is secured by inventory and accounts receivable and a second priority lien on the company's intellectual property and other assets. The term loan is secured by the company's intellectual property and a second priority lien on its inventory and accounts receivable.

Under the plan, all previously outstanding shares of Huffy common stock are cancelled as of October 14, 2005. New shares of common stock are being issued to certain creditors of the company in accordance with the plan. The company will have less than 300 shareholders and its shares will no longer be publicly traded. It will no longer be required to file periodic reports with the SEC.

As reported earlier (BOSS_0527), under the agreement, the China Export & Credit Insurance Corporation – a Chinese government-owned export credit insurance company, will receive 30% of Huffy’s new voting common equity in the form of new Class A shares and a $3 million note. The Class A common shares entitle the China Export & Credit Insurance Corporation to elect the majority of Huffy’s board of directors.

In addition to John A. Muskovich, Huffy’s president and CEO, the new Board now includes Michael Buenzow – senior managing director of FTI Palladium Partners, Kenny Chou – CEO of Shenzhen BoAn Bike Co., Douglas Gernert – president and CEO of totes>>ISOTONER Corporation, Raymond Kintzley – president of Ramiko, and Barry Metzger partner in Baker & McKenzie LLP. Zhidong Liang, EVP of China Export & Credit Insurance Corporation, will be the Board’s chair.

In addition to this control over the board, the China Export & Credit Insurance Corporation will have the ability to earn up to 51% of the aggregate new common voting stock over the next 5 years. Seventy percent of the new common equity in the form of new Class B shares and a $9 million note will be issued to the other unsecured creditors.

Huffy Corp. Emerges From Chapter 11

October 14, 2005
SGB Update

Huffy Corporation announced that it has emerged from the Chapter 11 reorganization process. The company officially concluded the reorganization process after completing all required actions and satisfying all remaining conditions in its Plan of Reorganization, which was confirmed by the U.S. Bankruptcy Court for the Southern District of Ohio on September 23, 2005.

One of the conditions to Huffy's emergence from Chapter 11 was the receipt of the necessary exit financing. This condition was satisfied with the company's closing yesterday of a $40 million revolving loan facility provided by a syndicate led by Wachovia Capital Finance Corporation (Central) and Wachovia Capital Markets, LLC, and a $10 million term loan from Patriarch Partners, LLC. The revolving loan facility is secured by inventory and accounts receivable and a second priority lien on the company's intellectual property and other assets. The term loan is secured by the company's intellectual property and a second priority lien on its inventory and accounts receivable.

John A. Muskovich, the company's president and CEO, said, “Huffy Corporation has now successfully completed a very difficult period in its long history. We have accomplished all of our major objectives for this process and have secured an exit financing package, which along with the support from our trade suppliers will provide assurance to our customers as to the strength of the new Huffy Corporation.”

The company's Board of Directors has been reconstituted and in addition to Mr. Muskovich now includes Michael Buenzow (senior managing director, FTI Palladium Partners), Kenny Chou (CEO, Shenzhen BoAn Bike Co.), Douglas Gernert (president and CEO of totes>>ISOTONER Corporation), Raymond Kintzley (president, Ramiko Co., Ltd.), Zhidong Liang (executive vice president of China Export & Credit Insurance Corporation), and Barry Metzger (partner, Baker & McKenzie LLP).

Mr. Liang, who will serve as the company's Board Chairman, said, “We congratulate Huffy Corporation upon its emergence from bankruptcy. Huffy Corporation is an important partner for the China-based companies which manufacture its bicycles and we look forward to a long and mutually beneficial working relationship.”

Added Mr. Muskovich, “Our strong relationships with our suppliers in China were a key factor in our ability to emerge from bankruptcy successfully, and we are grateful for their support. We too look forward to continuing to work with them closely.”

As provided in the Plan of Reorganization, all previously outstanding shares of Huffy common stock are cancelled as of October 14, 2005. New shares of common stock are being issued to certain creditors of the company in accordance with the Plan. The company will have less than 300 shareholders and its shares will no longer be publicly traded. It will no longer be required to file periodic reports with the Securities and Exchange Commission.

Share This