On October 31, 2010, Wolverine Tube, Inc. (“Wolverine”) filed petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware. According to the Declaration of Wolverine’s President in Support of Debtors’ Petitions (the “Declaration”), the company’s bankruptcy filing resulted from several factors, most notably a drop in cash due to volatility in commodity prices and high debt obligations. See Declaration at pp. 2-3. A copy of Wolverine’s Declaration is available here for review and a copy of Wolverine’s Petition for Bankruptcy is available here for review.
Wolverine is a Delaware corporation formed in 1987 as successor to a company started in Detroit, Michigan in 1916. Headquartered in Huntsville, Alabama, Wolverine manufactures and supplies copper tubing used in air conditioning systems, refrigeration, appliances and power equipment. The majority of the company’s business stems from the sale of tubing used by manufacturers of air conditioning units. As of the date of filing for bankruptcy, Wolverine employed 850 employees and operates at seven facilities in the U.S., Mexico, China, Portugal and in the Netherlands.
Going in to bankruptcy, Wolverine’s book value of assets totals $115 million against liabilities of $238 million. Revenues for the year ending in 2009 totaled $275 million, which according to the company “represents a significant decrease in net revenue compared to the prior year due to, among other things, a decrease in shipment because of lower demand as a result of the economic downturn.” Declaration at p. 7. The company forecasts revenues for 2010 at $281 million. In 2009, Wolverine issued 15% senior secured notes totaling $121.6 million to various noteholders. These notes replaced previously issued notes paying at 10.5% interest. Declaration at p. 15.
Objectives in Bankruptcy
According to Wolverine, its main objective in bankruptcy is to “restructure [its] indebtedness and significantly de-lever [its] balance sheet.” Declaration at p. 3. To reach this objective, the company began negotiations pre-bankruptcy with its secured noteholders in an effort to reach an agreement regarding restructuring Wolverine’s businesses. As a result of these negotiations, Wolverine reached a restructuring agreement with noteholders holding approximately 71% of the outstanding principal. This agreement with the noteholders was memorialized in a Plan Support Agreement which the company filed with the Bankruptcy Court as an exhibit to its Declaration. Declaration at p. 3. Wolverine’s Plan Support Agreement is available here for review.
This bankruptcy proceeding is before the Honorable Peter J. Walsh. Judge Walsh previously served as Chief Judge of the Delaware Bankruptcy Court. Wolverine is represented by the law firm Cozen O’Connor P.C..