Robertshaw Secures $56M Financing Amid Lawsuit

316
SHARE
Robertshaw Chapter 11 Deal Invesco

In a dramatic turn of events, appliance parts manufacturer Robertshaw US Holding Corp. has been granted approval by a Texas bankruptcy judge to access $56 million in Chapter 11 financing, paving the way for the company to seek bids for its assets. The decision comes after a heated dispute with asset manager Invesco, which raised objections over the impact of an ongoing lawsuit.

Invesco’s Objections Overruled

During a tense hearing presided over by U.S. Bankruptcy Judge Christopher M. Lopez, initial protests by Invesco were seemingly quashed after Robertshaw made concessions. These concessions included the addition of language to clarify that the proposed orders would have no bearing on the outcome of the lawsuit, effectively rendering them “litigation-neutral.”

Robertshaw Chapter 11 Deal Invesco : Clearing Legal Hurdles

The approved orders empower Robertshaw to access $56 million in debtor-in-possession (DIP) loans, utilize cash collateral, and initiate a bidding process for its assets, supported by a substantial $217 million stalking-horse offer. Judge Lopez, emphasizing the importance of neutrality in the orders, expressed gratitude for the efforts of all parties involved.

Settlement Reached

Integral to the proceedings is a settlement reached regarding an adversary proceeding involving Robertshaw, Bain Capital, and others against Guardian Life Insurance. This settlement ensures participation in the DIP facility and related measures for the settling parties.

Robertshaw Chapter 11 Deal Invesco : The Ongoing Legal Battle

At the heart of the dispute lies Invesco’s lawsuit, which alleges that Robertshaw unlawfully raised funds from a group including Bain Capital to settle debts, thereby infringing on loan agreements. Robertshaw, in response, filed an adversary action seeking to validate the transaction.

Protective Measures

In its final DIP filing, Robertshaw explicitly states that the orders will not prejudice any party involved in the adversary proceedings, addressing concerns raised by Invesco regarding the status of certain lenders under credit documents.

Robertshaw Chapter 11 Deal Invesco : Judge’s Caution

Judge Lopez, wary of the potential ramifications of the ongoing legal battle, voiced his reluctance to approve a final DIP that could later be challenged. He underscored the importance of ensuring stability for investors and stakeholders.

Company Background

Robertshaw filed for Chapter 11 protection with the aim of restructuring approximately $670 million of debt. The Illinois-based company, with a global presence, manufactures parts for various appliances, HVAC systems, and vehicles, employing over 5,200 individuals across 11 manufacturing centers worldwide.

Robertshaw Chapter 11 Deal Invesco : Legal Representation

In this complex legal saga, Robertshaw is represented by a team from Latham & Watkins LLP and Hunton Andrews Kurth LLP, while Invesco is represented by counsel from Glenn Agre Bergman & Fuentes LLP and Holland & Knight LLP.