Wheel Pros, the automotive wheel company backed by Clearlake Capital, has filed for Chapter 11 protection in Delaware bankruptcy court, carrying more than $1 billion in debt. The company’s reorganization plan will transfer control to senior lenders.
Wheel Pros Files for Bankruptcy : Pandemic Boom and Subsequent Challenges
Wheel Pros experienced significant growth during the COVID-19 pandemic but struggled with inflation and supply chain issues in the aftermath. These challenges ultimately led the company to file for bankruptcy late Sunday.
Debt-Equity Swap and Restructuring Plan
In September, Wheel Pros entered a restructuring support agreement with Clearlake Capital and its secured lenders. This agreement, supported by 99% of first-lien loan holders and 74% of first-in-last-out loan holders, includes a debt-equity swap, allowing the company to reduce its debt and reorganize under new ownership.
The company has filed a disclosure statement soliciting votes on its prearranged reorganization plan, marking a significant step toward restructuring its financial obligations.
Legal Representation and Court Assignment
The case is assigned to U.S. Bankruptcy Judge John T. Dorsey. Wheel Pros is represented by legal teams from Pachulski Stang Ziehl & Jones LLP and Kirkland & Ellis LLP, including attorneys Laura Davis-Jones, Timothy P. Cairns, and Steven Serajeddini.
