American Safety Razors Takes Steps in Pre-Arranged Bankruptcy
Posted by | Posted in Credit Report | Posted on 16-08-2010
American Safety Razors, the third biggest razor company in the U.S., has arranged for its first lien holders to take over its company. They are currently in the midst of a Chapter 11 bankruptcy as part of a step to seal the deal. While the company presently has $30 million in cash reserves and $25 million in debtor in possession funds, they owe a whopping $244 million to their first lien holder.
The second lien holders were owed a similarly obscene $178 million, but they couldn’t come up with money to pay off all ASR’s immediate financial obligations. It is not 100% official that this lien holder will take over, as a proposed auction would give creditors an opportunity to raise funds over the course of 7 weeks. Taking over American Safety Razors would be bittersweet for any lien holder, as the company is currently saddled with over $500 million in debt.
If American Safety Razor’s bankruptcy plan remains unchallenged by other lien holders, their first lien holder will assume obligations to trade suppliers, customers, and employees. As with any Chapter 11 business reorganization bankruptcy, the company can continue operating normally. But with a successful operating future secured, it is especially easy for American Safety Razors to conduct business as usual.
Though pre-arranged bankruptcies are very time and money-efficient, American Safety Razors will probably not exit their bankruptcy until this year’s fourth financial quarter. They plan to use their $25 million of debtor in possession funds to finance various bankruptcy costs.
Pre-arranged bankruptcy saves the average debtor a considerable amount of money—the longer one’s bankruptcy is drawn out, the more the suffering debtor will have to fork over for legal fees. The office of Legal Helpers makes sure that bankruptcy isn’t a draining process to your emotions, finances, or energy. Most of all, we respect our clients’ time and acknowledge that bankruptcy is often far down the list for their daily priorities. For patient, understanding legal assistance and a free initial consultation, call the office of Legal Helpers toll-free at 1-800-260-1402. www.legalhelpers.com
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