NEW YORK: Bankrupt Tupperware Brands agreed on Tuesday to sell its business to a group of lenders for $23.5 million in cash and over $63 million in debt relief, canceling its plans for an open-market auction of its assets.
The food storage and kitchen products company announced the deal at a bankruptcy court hearing in Wilmington, Delaware. U.S. Bankruptcy Judge Brendan Shannon said he would quickly schedule a separate court hearing to consider approval of the sale, which was likely the best result given the company's "difficult and challenging circumstances."
The Orlando, Florida-based company filed for bankruptcy protection last month, with $818 million in debt and a plan to find a buyer within 30 days.
But a faction of Tupperware's lenders opposed the company's sale plans, seeking instead to claim the assets for themselves.
The new sale agreement will allow the lenders to purchase Tupperware's brand name and operations in multiple key markets, Tupperware attorney Spencer Winters said at the court hearing.
Tupperware said it will initially focus on markets including the United States, Canada, Mexico, Brazil, China, Korea, India and Malaysia, and intends to follow on with European and additional Asian markets.
The company will wind down its operations in other markets where it has heavy liabilities, chief executive officer Laurie Ann Goldman said in a statement late on Tuesday.
During a court hearing last week, Tupperware argued that the lenders, which bought Tupperware's debt at a steep discount, should not be allowed to squeeze out Tupperware's other creditors and prevent them from benefiting from a sale. The lenders had argued that Tupperware's proposed auction would unfairly prevent them from using a debt exchange as part of their bid for Tupperware's assets.
The new deal strikes a middle ground, giving the lenders the ability to use debt cancellation for part of the purchase price, while also requiring them to put up some cash that Tupperware can use to pay other debts.
The lenders now poised to acquire Tupperware include Alden Global Capital, Stonehill Institutional Partners and a trading desk of Bank of America.
Tupperware's popularity exploded in the 1950s as women of the post-war generation held "Tupperware parties" at their homes to sell the containers as they sought empowerment and independence.
But the company said it relied too much on independent sales representatives in recent years, suffering a years-long slump in sales while missing out on opportunities to sell products online or in retail stores.