Sexy Hair Concepts, LLC and two affiliates - Ecoly International, Inc. and Luxe Beauty Midco Corporation - voluntarily filed for chapter 11 bankruptcy protection on Tuesday in the Central District of California. The companies distribute and market hair care products (under the Sexy Hair brand) from their headquarters in Chatsworth, California. Production and manufacture of the products is outsourced.
The companies listed approximately $80 million in assets and over $90 million in liabilities. The liabilities include approximately $62.5 million in obligations under a senior secured credit facility entered into in connection with a 2008 private sale transaction led by Thoma Bravo, LLC (a private equity firm). The companies also have approximately $25 million in obligations owing to Northwestern Mutual Life Insurance Company for subordinated unsecured notes issued in April 2008.
Sexy Hair has been in default of the senior secured credit facility since December 2008 and began missing payments on the credit agreement in June 2009. Prior to the bankruptcy filing, Sexy Hair attempted to resolve its financial difficulties by negotiating a sale and located a potential purchaser through a marketing process organized by Imperial Capital, LLC. However, the companies were ultimately unable to complete the sale outside of bankruptcy and are now seeking to achieve a similar result through a pre-arranged plan of reorganization supported by the credit facility agent (Bank of Montreal) and some of the secured lenders. Under the proposed plan, the potential purchaser will instead act as a plan sponsor and Sexy Hair's existing lenders will receive a pay-down on their debt and take $35 million of restructured debt.
Key court filings to date include (click on the title of any document for more information or to purchase):
- Chapter 11 Voluntary Petition. Fee Amount $1039 Filed by Sexy Hair Concepts, LLC
Emergency Motion For Interim And Final Orders Under 11 U.S.C. 361, 363, And 364: (NYSE:A) Authorizing Use Of Cash Collateral, (NYSE:B) Authorizing Debtor To Incur Post-Petition Indebtedness, (NYSE:C) Granting Security Interests, (NYSE:D) Authorizing Adequate Protection, And (NYSE:E) Granting Other Relief; Memorandum Of Points And Authorities
- Motion to Set Last Day to File Proofs of Claim Emergency Motion For Order Establishing Bar Dates For Filing Proofs Of Claim And Approving Form And Manner Of Notice Thereof; Memorandum Of Points And Authorities; Declaration Of Scott F. Gautier
- Emergency Motion Of Debtor-In-Possession For Order Authorizing Debtor To Honor Certain Prepetition Obligations To Customers And To Otherwise Continue, In The Ordinary Course Of Business, Customer Programs And Practices; Memorandum Of Points And Authorities In Support Thereof
- Emergency Motion Of Debtor-In-Possession For Order Authorizing Debtor To Pay Administrative Expenses To Vendors Pursuant To 11 U.S.C. 503(b); Memorandum Of Points And Authorities
- Motion for Approval of Chapter 11 Disclosure Statement And Solicitation, Voting, And Confirmation Procedures; Memorandum Of Points And Authorities
Read more: http://www.netdocketsblog.com/2010/12/sexy-hair-concepts-files-for-bankruptcy.html#ixzz18pQ4QBef