Holley Performance Products Inc., a century-old maker of specialty aftermarket parts, filed for bankruptcy, faulting a late 1990s expansion for saddling the company with too much debt according to the folks over at Bloomberg News.
The privately held company would be taken over by noteholders, according to an outline of a reorganization plan filed today in U.S. Bankruptcy Court in Wilmington, Delaware.
The company, based in Bowling Green, Kentucky, listed debts of $243 million and assets of $106 million as of Jan. 28.
Holley will pay all general unsecured claims in full, according to an affidavit from Thomas W. Tomlinson, chief financial officer of the reorganizing company.
Holley and four of its affiliates filed for bankruptcy protection about two years after the company renegotiated the terms on part of the 12.5 percent notes that were due last year. Holley's majority shareholder, funds managed by Kohlberg & Co., quit providing the company the cash it needed to make interest payments, according to court papers.
Holley has about 390 employees in Kentucky, California and Mississippi who make carburetor and other fuel and air-systems parts with brand names including Hooker, FlowTech and Nitrous Oxide Systems.
Late last week, it was announced that a judge has granted interim approval for a $60 million bankruptcy loan for Holley Performance Products, Inc. The loan would be used to pay off about $40 million Holley owed banks when it filed for Chapter 11 protection earlier in the week.
Reorganization loans will be converted into $65 million Chapter 11 exit loans, once the company emerges from what is expected to be a fast trip through bankruptcy court.
Along with its Chapter 11 petition, Holley filed a "pre-packaged" restructuring plan that converts about $100 million worth of debt into equity and will leave Holley largely the property of creditors.
The company says it already has the votes to push the plan through the courts and hopes to do so by the end of March.