HOLDREGE — The Briggs & Stratton Corporation, parent company of Allmand Inc. in Holdrege, filed for bankruptcy last week.
Briggs and Stratton announced it was filing voluntary petitions for a court-supervised reorganization under Chapter 11 of the U.S. Bankruptcy Code to address its debt obligations and facilitate the potential sale of the company, according to a press release.
“Essentially, Briggs & Stratton has been under stress for quite a while. They had some major loans coming due. They received an extension,” said Phelps County Development Corporation Executive Director Ron Tillery.
The company reached an initial agreement with KPS Capital Partners, which will acquire all of the company’s assets and assume certain customer, employee and vendor liabilities. Liabilities assumed include rebates and allowances, warranties, employee accrued vacation and post petition vendor accounts payable. KPS Capital Partners has agreed to act as a stalking horse, as other competing offers to buy Briggs & Stratton are being solicited. Stalking horse is an initial bid on the assets of a bankrupt company that sets the low-end bidding bar so that other bidders cannot underbid the purchase price, according to investopedia.com.
The pandemic has affected the Holdrege facility with many employees being furloughed and a pay reduction plan in place for salaried employees, Tillery explained.
“About a month ago they started calling some of the production workers back and resumed production of certain products. I’m told they will have another recall here in the next week or two of a significant number of those people on furlough. That’s in anticipation of a ramp up of their products that are seasonal like the portable heaters and those things,” Tillery said.
Despite the bankruptcy announcement, Tillery is optimistic about the company’s future. Allmand current product line includes light towers, portable lights, generators, compressors and heaters.
“Allmand was one of their more profitable units, and it had been growing since 2017 at a pretty aggressive rate,” he said. “It is more about the parent company than it is about Allmand, of course. ... We think the purchase by KPS Capital Partners is a very good thing for Briggs & Stratton.”