Wednesday, February 07, 2001

Sunbeam files for Chapter 11




The Associated Press

        BOCA RATON, Fla. — Struggling appliance maker Sunbeam Corp., owner of brands such as Mr. Coffee coffee makers, First Alert smoke alarms and Coleman outdoor gear, Tuesday filed for Chapter 11 bankruptcy protection to reorganize its operations.

        The filing in U.S. Bankruptcy Court in the Southern District of New York came as Sunbeam was unable to resolve a $2.6 billion debt load. Its troubles were exacerbated by the cost of lawsuits filed by shareholders whose stock became virtually worthless after the company restated its profits and losses from 1996 to 1998.

        As part of the restructuring, Sunbeam will lose its nine-year listing on the New York Stock Exchange and turn private, chair man and CEO Jerry W. Levin said Tuesday. Banks that have agreed to provide Sunbeam with a $235 million credit line will hold 100 percent of the company's stock.

        Mr. Levin said the filing would let Sunbeam keep its business “running normally while we put our financial house in order.”

        One analyst was optimistic about the future of Sunbeam, saying the company could come out of Chapter 11 stronger than before because it won't be so dangerously leveraged.

        “I don't think the company is dead at all,” said Rommel Dionisio of Friedman, Billings & Ramsey Co. in Virginia. “There was just no margin for error. No breathing room. When the economy turned sour on them they just couldn't pull through.”

       



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- Sunbeam files for Chapter 11
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