Author Topic: Prince files chapter 11 Bankruptcy! Reorganization! Current Shareholders Toast!  (Read 1491 times)

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Offline HarryWild

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BORDENTOWN, N.J. (AP) — Prince Sports, which for more than 40 years has been affiliated with tennis greats like Jimmy Connors, Martina Navratilova, as well as modern stars like Maria Sharapova, has filed for Chapter 11 bankruptcy protection.

"After considering several business options, the Board of Directors and the senior management team firmly believe that the Chapter 11 filing is not only a necessary step but also the right thing to do to ensure a secure future for Prince," said CEO Gordon Boggis.

Prince, which was founded in 1970 and pioneered the oversized racket, has wrestled with heavy debt and said it would use the bankruptcy process to develop a competitive business model. The proposed restructuring would relieve Prince of its more than $60 million debt burden, the company said.

It has secured a commitment for debtor-in-possession financing to allow it to continue to operate while under bankruptcy protection.

Prince Sports Inc., based in Bordentown, N.J., makes rackets, shoes and accessories for tennis, squash and other sports. It has changed ownership several times over the years and was once owned by Benetton Group, the parent company of the clothing company United Colors of Benetton.

The private equity firm Nautic Partners acquired the company in 2007.

May 1, 2012 at 1:15pm

Prince Sports files for Chapter 11; plans debt-for-equity swap

Tennis racquet maker Prince Sports Inc. filed for Chapter 11 protection in Wilmington, Del., today, with a proposed reorganization plan that would hand the company’s equity to licensing company Authentic Brands Group.
Prince CEO and President Gordon Boggis blamed the company’s bankruptcy on “declines in the global racquet sports market and demand for the industry’s products, combined with increased competition over the past five years,” as well as the downturn in consumer spending tied to the economic downturn starting in 2008, according to an affidavit filed with the court. Prince Sports’ portfolio of brands, distributed in more than 100 countries, includes Prince (tennis, squash, and badminton), Ektelon (racquetball), and Viking (platform/paddle tennis). The company’s international subsidiaries in Europe and Asia are not included in the Chapter 11 proceedings.
For the fiscal year ending Dec. 31, 2011, Prince reported total book value assets of about $54.2 million, including about $9.7 million in accounts receivable. The company currently owes about $65 million in secured debt to ABG-Prince LLC (Authentic), $10.2 million in trade debt, and about $1.8 million in other payables, court records show.
Under the proposed plan, Authentic would discharge all of Prince’s secured debt in exchange for 100% of the new equity interests in the reorganized company. Current equityholders will be wiped out. Prince is seeking bankruptcy court approval of a $2.5 million debtor-in-possession facility provided by Authentic, priced at L+800, with up to $1 million available on an interim basis.
Prince began its restructuring efforts in November 2010 when it hired UBS to sell the company’s brands in certain product categories, as well as its ongoing operations in China, to pay down a significant portion of its secured debt and to restructure its debt with its then-lenders, GE Capital and Madison Capital, according to court filings. That process ended in February 2011 when it failed to generate any acceptable bids.
The company launched a second, more extensive sale process in October 2011 with the help of Robert W. Baird and Company. Several potential buyers emerged, interested both in acquiring assets on a piecemeal basis and as a going concern, Boggis said.
Prince was in the process of negotiating a sale with three potential third-party purchasers in March 2012 for substantially less than the existing amount of secured debt when Authentic acquired the debt from GE and Madison on March 27, and obtained their previously held liens on the company’s assets.
“Given Authentic’s proven track record in successfully acquiring and managing companies with extensive intellectual property holdings and the fact that Authentic is now the single holder of the secured debt, the company believes that its acquisition by Authentic pursuant to the terms set forth in the plan are in the best interests of the company’s economic constituents and provide the best prospects for the company’s successful reorganization as well as the deleveraging of the secured debt from the reorganized company’s balance sheet,” Boggis said. Authentic’s current investments under management include TapouT and the “brands” for Marilyn Monroe and Bob Marley.
Law firm Pachulski, Stang, Ziehl & Jones is advising Prince in its restructuring. Authentic is represented by DLA Piper.
A hearing on the company’s first-day motions is scheduled for Wednesday in Wilmington, before Judge Kevin Carey. – John Bringardner

Offline HarryWild

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Prince of a Racquet

05/01/2012 - 6:43 PM

We moved offices at Tennis magazine last week, and as I was clearing out mine, I came across an original Prince Graphite in a pile of racquets. A few of us took turns twirling it and giving it a few shadow swings. The old-style leather grip felt raw but good. There was nothing soft or overly comfortable about it; you knew you had a weapon in your hand. The plain, dark, green-and-gold cosmetic was simple and striking compared to many of the splashier and gaudier color combinations we see today. I was confident that I could take it out on the court and it would play as well as anything made in the last year. The Graphite, used by Andre Agassi, Michael Chang, and Gabriela Sabatini along with many thousands of hackers, was one of the classic mid-80s frames that set the template for what has been made ever since. For all of the various nano-technologies and atomically altered materials of the ensuing decades, it was hard to improve on what Prince created with the Graphite.

It turned out that the company, the one most closely associated with the tennis boom, wouldn’t get back to its early peak. Prince, after changing hands among private-equity investors in recent years, filed for bankruptcy today. It has been scooped up by Authentic Brands, a “brand development” firm that also recently bought the rights to the image of Marilyn Monroe. ABG-Prince eventually plans to return as a “performance racquet” manufacturer. The company cited “increased competition” and the financial downturn as reasons for the decline. The two-decade rise of Babolat from string maker to racquet-making titan was the biggest of those new competitors. Prince was also hurt by the recession and flat tennis-equipment sales across the board. The company put money into developing its EXO3 technology and continued to try to sell its frames at high prices. Having its most famous endorser, Maria Sharapova, defect from an EXO3 Black to a Head frame in 2010 didn’t help, either.

Which is all a shame, because from start to finish Prince was an innovator. The company’s story is the story of the Open era. Founded as a ball-machine manufacturer in Princeton, New Jersey, in 1970, it was bought by Howard Head six years later. Head, the inventor of the aluminum ski, had taken up tennis in retirement and found it too difficult to play with the old small-headed wooden racquets. That was a common complaint, obviously, but Head was one of the first to try to do something about it. He designed the oversize aluminum Prince Pro, which began to appear, mostly to guffaws, at country clubs and newly built public courts in ’76.
Here was a bizarrely futuristic physical manifestation of the tennis boom, an invention that helped the millions of new players trying to learn the sport, but which was dubbed a “cheater’s racquet” by traditionalists. Pam Shriver changed all of that when she reached the final of the U.S. Open as a Prince-wielding 16-year-old in 1978. The bigger sticks were here to stay, and the P logo became inescapable around the sport, a graphic symbol of its democratic new era. By the start of the next decade, Prince owned an astounding 30 percent of the U.S. racquet market. For all the talk we hear about spin-producing strings and ball-slowing surfaces today, that shift, to the bigger frame, is still the most seismic change of tennis's last four decades.

Today Prince could be said to represent something else. The demise, for now, of this classic American brand largely at the hands of a European company, Babolat, mirrors the general shift toward Europe—or at least out of the United States—in the sport at large. But Prince leaves a legacy of quality. The company was proud that they continued to put money into R&D, into trying to make their racquets better. At the same time, though, many consumers were drawn to the updated vintage frames that have been issued by Dunlop and Wilson in recent years. Prince wanted to push the EXO3.

Picking the Graphite up reminded me of the one time that I used it in a real match. In college my racquet of choice was the Sampras Wilson Pro Staff, but during a doubles tournament I broke the strings in all of the frames I had in my bag. My partner and I made the final, so I grabbed another teammate's Prince Graphite as I was walking onto the court. My first shots in the warm-up were the first shots I had ever hit with it. Do I need to tell you how this story turns out? I went on to play as well I’ve ever played in a doubles match, and we upset the top seeds for the title. Afterward, I handed it back to my teammate and said, “You can’t lose with this thing.”

For some reason, I never picked up the Graphite again. Brand loyalty is real, I guess, and I was a Wilson guy at the time. Now most young players I see are Babolat kids; with its simple but striking blue-and-yellow cosmetic and big-name endorser, Rafael Nadal's AeroPro Drive is the Graphite of the moment. Whatever the future brings, though, no racquet company had a bigger effect on the modern game, from top-ranked pros to rank beginners, than Prince.

Offline Dallas

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When I first saw this thread, I thought you were talking about the singer "Prince" :rofl_2: :rofl_2: :rofl_2: :rofl_2: :rofl_2:

Offline FedFanForever

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Not surprising. Wilson, Babolat, Head pretty much dominate tennis gear.
Then we will fight in the shade.

Offline Alex

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When I first saw this thread, I thought you were talking about the singer "Prince" :rofl_2: :rofl_2: :rofl_2: :rofl_2: :rofl_2:
you go girl  :rofl_2:.

however, hopefully they will make it. it is a very old and very well recognized brand name.