Chapter 7 - Solutions for a Financial Crisis » Chapter 7 Bankruptcy

Swimming pool parts manufacturer Latham International recently decided to file bankruptcy. The company makes vinyl liners and components for in ground swimming pools.

A recent Bloomberg article reported the company will reorganize under Chapter 11 bankruptcy.

They filed for bankruptcy in the Delaware Bankruptcy Court as they are $239.4 million in debt with $67 million in assets.

Latham claims it is one of the biggest makers of in-ground swimming pool components and accessories in North America. In their bankruptcy filing they said there is now a low demand for such pools, and to stay afloat the company will need to reorganize their debt.

CEO Mark Laven said in the bankruptcy filing: “Commencing in 2007 and continuing today, the housing bust and deteriorating economic climate resulted in declining industry sales.”

Laven also said that “the continued downward spiral of consumer sentiment due to the state of the economy has contributed to the declining sales experienced industry wide.”

Sales in the swimming pool industry are down by 45 percent. Consumers are spending less on many items, including luxuries such as swimming pools.

Laven hopes the company will be out of bankruptcy by February because he predicts the company will be out of cash funds by then.

In exchange for the $147.9 million debt-plan filed under the Chapter 11, the plan calls for term loan lenders to receive all new stocks.

The company owes additional notes in the amounts of $41.8 million and $7.8 million to its creditors.

The reorganization plan states that operations for the company will be financed with a $25 million loan which is backed by the company’s assets. But this must be first be approved by the bankruptcy court.

The filing bankruptcy plan also mandates that the company’s unsecured creditors will be paid in full.
The company claimed they lost $181.4 million in revenue in the month of November.