On March 24, 2013, NAMCO, LLC (“NAMCO”) filed a chapter 11 petition for bankruptcy in the United States Bankruptcy Court for the District of Delaware. Based in Manchester, Connecticut, NAMCO sales swimming pool accessories and equipment throughout the Northeast and Mid-Atlantic United States. See Declaration of Lee Diercks in Support of Chapter 11 Petition and First Day Motion (the “Declaration” or “Decl.”) at *2. In addition to selling pool supplies, NAMCO owns and operates a chemical repackaging center which allows the company to sell and distribute chemicals through its website. Id.
Going in to bankruptcy, NAMCO operates thirty-seven (37) stores in ten states. The company’s stores range anywhere in size from 11,000 to 60,000 square feet. In addition to its retail stores, NAMCO operates in 190,000 square feet of office and distribution space and 40,000 square feet for its chemical repackaging center. Id. at *3.
NAMCO presently employs approximately 280 employees, none of whom are represented by unions. Sales for fiscal year 2011 reached $92 million, however, annual sales in 2012 dropped to $82 million. Decl. at *4. NAMCO attributes its declining sales to weakened demand in the pool and patio industry. According to NAMCO, the drop in demand, in turn, stems from “a poor housing market, an overall weak U.S. economy, complicated by unfavorable weather conditions …” Id.
Objectives in Bankruptcy
In June of 2012, NAMCO entered into a debt agreement with Salus Capital Partners LLC. NAMCO has approximately $18.6 million in pre-bankruptcy secured debt. Of this amount, $9.3 million is drawn down on a revolver agreement with Salus. Decl. at *6. NAMCO is also a borrower under secured notes with a principal balance of $9.3 million. Id. The notes and revolving debt agreement are secured by substantially all of NAMCO’s assets.
NAMCO defaulted on its debt agreements in December of last year. Since learning of the default, NAMCO has been working with its lenders regarding a potential sale of a portion of the company in exchange for an infusion of additional cash. Decl. at *9. Through negotiations, NAMCO and Salus were able to agree on a debtor in possession financing agreement which would provide the company with much needed cash while going through bankruptcy. Id. at *9. While in bankruptcy, NAMCO intends to use the Salus debtor in possession facility to either pursue a sale of the business or successfully reorganize. Id. at *15.
The NAMCO bankruptcy is before Judge Peter J. Walsh under case no. 13-10610(PJW). NAMCO is represented by the law firm Olshan Frome Wolosky LLP.