Schutt Files For Chapter 11

September 7, 2010 /

Schutt Sports, Inc. (“Schutt” or the “Company”), a leading domestic manufacturer of protective sports equipment and aftermarket reconditioning services, today announced that Schutt and certain of its affiliates filed petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The company intends to operate its business without interruption during the Chapter 11 cases as it explores certain strategic options to maximize value and recoveries for all stakeholders.

“Schutt’s management and board of directors determined that a Chapter 11 process would provide the best long-term solution for our customers, suppliers, and employees,” said Robert Erb, President and Chief Executive Officer of Schutt. “This process will allow us to continue operating our business as usual and to continue servicing our customers without disruption. We have the support of our bank, a great brand and look forward to strengthening our balance sheet and serving our customers for many years to come.”

The company has obtained a Debtor-in-Possession financing facility of $34 million, which will provide sufficient funds to continue normal business operations.

The company is exploring strategic options to maintain long-term health, including selling some or all of the businesses or raising additional equity. The company has received a proposal for a plan of reorganization funded by a rights offering, backstopped by a group of investors. Riddell, Inc., whose lawsuit was a proximate cause of the need to file Chapter 11 would not be given the opportunity to invest in the proposed rights offering.

The proposed plan of reorganization would also provide for a significant deleveraging of the company’s balance sheet. The company is considering this proposal, while it also seeks other equity sponsors and acquirers for Schutt. If one of these transactions were to materialize, it would be implemented via a plan or Section 363 auction transaction. The company has engaged Oppenheimer & Co., Inc., as its investment banker, to explore these options.

The company will continue to pursue vigorously its appeal of the judgment entered against it in favor of Riddell, Inc. during this process.