© Reuters.
By Dietrich Knauth
NEW YORK (Reuters) – Appliance component manufacturer Robertshaw U.S. Holdings filed for Chapter 11 bankruptcy protection on Thursday, seeking to cut $670 million in debt and resolve litigation between its lenders.
The company, owned by private equity firm One Rock Capital Partners, entered bankruptcy with a restructuring agreement supported by a majority of its lenders, according to documents filed in Houston, Texas bankruptcy court. The company will also explore a bankruptcy sale as an alternative to its debt restructuring.
The company makes components, such as thermostats, valves, switches, and timers that are used in household and commercial refrigerators, dishwashers, laundry machines, and other appliances.
“Robertshaw may not be a household name, but its products appear in almost every household,” attorney George Klidonas said at a Thursday court hearing in Houston.
Robertshaw said it was unable to sustain its high debt level in the face of rising interest rates and lingering supply chain challenges that arose during the COVID-19 pandemic.
The Itasca, Illinois-based company said it has $832 million in debt. In the last nine months of 2023, Robertshaw generated a gross profit of $58.8 million.
The company’s efforts to address its debt outside of bankruptcy spurred litigation between its lenders in 2023.
A minority group of lenders, including Invesco, Park Avenue Institutional Advisers and Marathon Asset Management sued Robertshaw and some of its lenders last year, arguing that the company took on new debt in 2023 that violated existing loan agreements and diluted the value of their loans’ collateral.
Robertshaw will seek to resolve that dispute in bankruptcy, either through mediation or litigation in bankruptcy court, according to court documents.
The company has lined up a $56 million bankruptcy loan funded by its majority lender group, according to court filings, and will seek bankruptcy court approval for that loan at a later date.
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