Owner of Zest Soap, V05 Shampoo Files for Chapter 11 Bankruptcy
(Bloomberg) -- High Ridge Brands Co., owner of faded consumer names like Zest soap and VO5 shampoo, filed for Chapter 11 bankruptcy in Delaware with plans to sell itself in a court-supervised process.
The company listed as much as $500 million in assets and at least $500 million of liabilities in its bankruptcy petition. High Ridge said in a statement it’s in active discussions with potential bidders and has $20 million committed for a bankruptcy loan from current lenders.
High Ridge blamed its bankruptcy in part on a soap supplier who increased prices by 60% and then failed to deliver enough product on time, hurting sales, Chief Restructuring Officer M. Benjamin Jones of Ankura Consulting Group, LLC said in court papers. Much of the company’s products are sold through discounters like the Dollar Tree, Walmart and 99 Cents Only stores.
High Ridge’s products, which include personal care brands like breath freshener Binaca, Coast soap and Dr. Fresh toothpaste, have lost name recognition over time amid competition on store shelves. Like many legacy personal care brands, a major setback for High Ridge was a loss of shelf space in Walmart stores, according to a Moody’s report from 2018.
The Stamford, Connecticut-based company is owned by the private equity firm Clayton, Dubilier & Rice. In October, High Ridge skipped payments on its debts and won forbearance from lenders, giving the company time to evaluate its options, according to an S&P report. The company’s junk bonds languished for more than a year before that, most recently trading for less than a penny on the dollar.
The company owes senior lenders $263 million and unsecured noteholders $261 million, court papers show. High Ridge expects to continue paying its suppliers in full and maintain on-time deliveries to customers, according to an emailed statement.
The case is High Ridge Brands Co., 19-12689, U.S. Bankruptcy Court for the District of Delaware
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