Court Approves Stock Reorganization Plan
The United States Bankruptcy Court for the District of Delaware has approved Stock Building Supply Holdings LLC's Chapter 11 plan of reorganization, company officials report. The confirmation order paves the way for the building products distributor to emerge from Chapter 11 within the coming weeks.
"The court's confirmation of our plan is a major milestone in the recapitalization of our business," says Joe Appelmann, Stock president & CEO. "We have taken a very hard look at our business, taking proactive steps to reshape the company and realign it with the current market reality. The reorganization process will allow us to emerge as a stronger company, better positioned to continue to deliver exceptional service to our customers. I want to thank all of our hardworking associates around the country who, throughout this difficult chapter in our history, have maintained their focus and dedication to providing the U.S. market with the highest quality service and products."
Immediately preceding the filing of its Chapter 11 recapitalization plan, Stock announced a new ownership structure under which The Gores Group, a Los Angeles-based private equity group, owns 51 percent of the company and Wolseley plc, the company's former parent company, maintains a 49 percent stake. As part of the transaction, Gores has committed to invest $75 million in the company and to provide a $125 million revolving credit bridge facility. Gores' investment was conditioned upon completion of a voluntary, pre-packaged Chapter 11 process.
In addition to facilitating the Gores Group investment, the Chapter 11 recapitalization has enabled Stock to take the actions necessary to focus on markets with the best prospects for growth and ensure the company is well positioned for the housing market upturn, officials note. According to a May 18 article in the Triangle Business Journal, Stock said it will cut up to 2,200 employees and cancel 210 lumberyard and showroom leases as part of its agreement with Gores.
Although the company is not commenting on the future of individual locations, including its window manufacturing and door pre-hanging facilities, officials note that in closing certain operations, Stock is focusing on exiting underperforming markets. The company is not looking to exit any particular business segments as result of the restructuring process.