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Law360 (July 20, 2020, 11:08 AM EDT) -- Gasoline engine maker Briggs & Stratton filed for Chapter 11 in a Missouri bankruptcy court Monday, hobbled by the COVID-19 pandemic and carrying over a billion dollars in debt with a $550 million stalking horse bid from private equity firm KPS Capital Partners.
In a statement Monday, the Wisconsin-based company said it had secured $677.5 million in debtor-in-possession financing from KPS and its asset-based lenders to keep the company operating during the Chapter 11 case.
"The challenges we have faced during the COVID-19 pandemic have made reorganization the difficult but necessary and appropriate path forward to secure our business. It also gives us support to execute on our strategic plans to bring greater value to our customers and channel partners," CEO Todd Teske said in the statement.
Founded in 1908, the company manufactures gasoline engines for lawnmowers, electrical generators, pressure washers and a number of other applications. The company said it has manufacturing and assembly plants at eight U.S. locations as well as in China, Australia and Brazil. It reported $1.84 billion in sales for 2019.
The company's Chapter 11 petition listed between $1 billion and $10 billion in liabilities, and gave $550 million as the stalking horse bid from KPS affiliate Bucephalus Buyer LLC.
The DIP package consists of $265 million from KPS and $412.5 million from the ABL lenders, the statement said.
The company said the filing does not include any of its overseas subsidiaries.
In its own statement Monday, KPS co-managing partner Michael Psaros said the firm intends to capitalize on Briggs & Stratton's "many attractive growth opportunities," including its substantial investment in research and development.
"The new Briggs & Stratton will be conservatively capitalized and not encumbered by its predecessor's significant liabilities," he said.
KPS said it has reached an "agreement in principle" with the United Steelworkers of America for a new contract with Briggs & Stratton's union employees when KPS assumes control.
Earlier this year Briggs & Stratton accused China of dumping lawn mower engines in the U.S. market at unfairly low prices and the U.S. Department of Commerce agreed to enact new duties last month.
The company said it had retained Ernst & Young as its financial adviser and Houlihan Lokey Capital Inc. as its investment banker.
Briggs & Stratton is represented by Robert E. Eggmann, Christopher J. Lawhorn and Thomas H. Riske of Carmody MacDonald PC and Ronit J. Berkovich, Debora Hoehne and Martha E. Martir of Weil Gotshal & Manges LLP.
The case is In re: Briggs & Stratton Tech LLC, case number 20-43600, in the U.S. District Court for the Eastern District of Missouri.
--Editing by Marygrace Murphy.
Update: This story has been updated with additional information on Briggs & Stratton and a statement from KPS.
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