Surfwear Company Quicksilver Files for Chapter 11 Bankruptcy

Posted on September 23, 2015 at 12:00pm by

For anyone who grew up during the 90s, Quicksilver was an iconic brand worn by skaters, people who enjoyed surfing and those who loved extreme sports. After four decades of business, Quicksilver is filing for Chapter 11 bankruptcy because it is seeking relief from payments to its various lenders.

During the last year, sales for Quicksilver products have dropped 14 percent and the company has posted losses of over $300 million. Like other companies we have written about lately, Quicksilver is in a position where it may not have enough cash on hand to pay back its creditors.

Filing for Chapter 11 bankruptcy will give Oaktree Capital Management and Bank of America control of the company, in addition to providing $279 million in additional funding for Quicksilver. Oaktree Capital Management is the same financial firm that has provided funding for Billabong International, a rival company of Quicksilver. Despite doing business with a major competitor, the deal could reduce existing debt for Quicksilver by more than $500 million.

How Does Quicksilver Benefit By Filing for Chapter 11 Bankruptcy?

By filing for bankruptcy, Quicksilver can keep its doors open as a debtor-in-possession. Debtor-in-possession is a term that describes how businesses can continue to operate during the bankruptcy process with approval from courts and creditors committees. Quicksilver will gain additional capital from debtor-in-possession financing and an opportunity to refinance its debt obligations during the Chapter 11 bankruptcy process.

Had Quicksilver not filed for Chapter 11 bankruptcy and found itself in a position where it was unable to pay back lenders, the outcome could have been disastrous for both the company and its shareholders.

The Sader Law FirmKansas City Bankruptcy Attorneys



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