(Bloomberg) — Wheel Pros, a maker of after-market specialty auto parts, filed for bankruptcy protection after struggling with inflation costs and a slump in demand.
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The Colorado-based company, which announced a rebranding to Hoonigan in 2023, filed for Chapter 11 bankruptcy in Delaware. It listed assets and liabilities of $1 billion to $10 billion in its petition. Chapter 11 filings allow a company to continue operating while it works out a creditor repayment plan.
The company has entered into a restructuring-support agreement with creditors and expects to cut approximately $1.2 billion of debt, while securing up to roughly $570 million in new capital, according to a separate company statement. Wheel Pros, founded in 1995 and acquired by Clearlake Capital Group in 2018, had raised $235 million last year in a deal that had favored certain creditors over others.
The company expects to emerge from Chapter 11 within two months under the majority ownership of a group of its current lenders, according to the statement.
The restructuring pact also provides a motion seeking to approve additional funds including a $110 million term loan debtor-in-possession facility. As a result, the company said it expects to continue operating during restructuring without impacting trade creditors.
In addition, Wheel Pros signed an agreement to divest its 4 Wheel Parts retail stores, associated e-commerce sites, and certain other assets, according to another statement.
(Updates to include agreement on divestment)
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