A Tupperware reached an agreement for its creditors to acquire the business, ending a dispute that could end the activities of the iconic pot company, which is in judicial recovery in the United States, the so-called “Chapter 11“, since last month.
The company and its debt holders, which include investment funds affiliated with Alden Global Capital and Stonehill Institutional Partners, have reached an agreement in principle in which creditors will buy the business in cash and credit, according to Spencer Winters, an attorney representing Tupperware.
It was agreed that the creditors will pay US$23.5 million in cash and exchange US$63.8 million in debt they have for equity in the company. The two sides will work out the details of the sales contract in the coming days and return to court next week for final approval.
The company faces more than $800 million in unpaid debt. Creditors who were fighting Tupperware are owed more than $460 million, giving them the majority of the company’s long-term debt, according to court documents.
Both sides acknowledged the influence that the judge in the case, Brendan L. Shannon, had. had when pressuring them to resolve a dispute that threatened to close the company, which sells its plastic containers through 465,000 door-to-door salespeople around the world.
“It was largely through the court’s efforts that the parties were able to reach a consensus,” said the creditors’ lawyer, Allan S. Brilliant, in court this Tuesday (22).
Last week, Judge Shannon halted a legal battle between Tupperware and creditors, asking lawyers on both sides to meet with him for a closed-door conference.
The two sides had been arguing over Tupperware’s use of the money it was holding as collateral and creditors’ demand that the company abandon its reorganization effort and liquidate instead.
“This is not a typical sales format,” Judge Shannon concluded at Tuesday’s hearing. “I appreciate the parties’ engagement on difficult issues and the creative approach they have developed.”
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