Credit & Capital

Shutter Maker Files Chapter 11 With Sale Plan

American Home Products has accepted a "stalking horse" bid for its assets, which include the Louver Shop and Danmer brands.
Matthew HellerJune 3, 2019
Shutter Maker Files Chapter 11 With Sale Plan

Shutter and blind manufacturer American Home Products has filed for bankruptcy with a plan to sell most of its assets to private-equity investors.

Gainesville, Ga.-based American Home, one of the largest custom shutter companies in the United States, sells under the Louver Shop and Danmer brand names. Its Chapter 11 petition came just four months after it was unable to negotiate a new distribution deal with Home Depot.

According to court papers, the company has more than $12.5 million in secured debt. A “stalking horse” bidder identified as The Louver Shop Holdings has agreed to acquire substantially all of its assets for $8 million, consisting of a credit bid of a portion of the secured debt.

The purchase agreement indicates the buyer is an affiliate of private-equity firm Squire Ridge, which specializes in investing in privately-held manufacturing companies.

“The debtor intends to use the Chapter 11 process to consummate a going concern sale of the business to the stalking horse bidder or to any interested and qualified party making a higher and better offer,” Chief Restructuring Officer Wayne Tanner said in a court declaration.

American Home was formed in 2015 to acquire American Made Shutters, which was founded in 1976. Custom plantation shutters account for 80% of its product mix and annual revenues were historically about $36 million.

Tanner said American Home has faced “significant challenges” resulting from the consolidation of all production in Gainesville.

“Done primarily as a cost-saving measure that would reduce overhead and create efficiencies, the shift to a single manufacturing facility located in the southeastern part of the country led to labor turnover, extended lead times, missed delivery dates, and an increase in the number of damaged or non-compliant goods due to having to ship product all the way across the country,” he said.

The consolidation problems, combined with the high secured debt load, “finally caught up with the debtor as the Danmer division began to lose money,” according to Tanner.

Squire Ridge has also agreed to provide American Home with a $400,000 loan to keep operating in bankruptcy.