July 10, 2011, 12:23 PM EDT
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By Bill Rochelle
July 10 (Bloomberg) — ArchBrook Laguna Holdings LLC, a distributor of consumer electronics, computers, and appliances, filed for bankruptcy with a plan to sell the business at an auction next month. No buyer is under contract.
The Chapter 11 petition filed July 8 in U.S. Bankruptcy Court in New York listed assets of $246.2 million against debt totaling $176.4 million. Archbrook’s principal customers include Wal-Mart Stores Inc., Best Buy Co. Inc., and Costco Wholesale Corp.
ArchBrook, based in Carlstadt, New Jersey, was forced into bankruptcy when secured lenders called a default on a credit agreement and some suppliers stopped shipping, according to bankruptcy court filings. GE Capital Services Inc., Bank of America NA, and PNC Bank NA are owed $36.9 million on a revolving credit line.
ArchBrook generated $808 million revenue in 2010 by delivering 6.8 million packages, of which 44 percent were computers, the court filing said. The audit for 2010 hasn’t been completed due to accounting problems.
Unsecured creditors with the largest claims include Dell Inc., which is owed $9.8 million, Direct Entertainment Media Group Inc., owed $8.5 million, and Garmin Ltd., $5.7 million.
The lenders will provide $50 million in secured financing for the Chapter 11 case.
ArchBrook is asking the bankruptcy judge to hold a hearing July 19 to approve auction and sale procedures. If the judge goes along, the hearing to approve the planned Aug. 8 sale would be held Aug. 10.
The case is In re ArchBrook Laguna Holdings LLC, 11-13292, U.S. Bankruptcy Court, Southern District New York (Manhattan).
–Editors: Anthony Aarons, Christopher Scinta
To contact the reporter on this story: Bill Rochelle in New York at wrochelle@bloomberg.net
To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net
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