On Nov. 4, Florida-based Sun Capital Partners filed in the U.S. Bankruptcy court for Chapter 11 bankruptcy protection. Sun Capital Partners is a private equity firm based in Fort Walton that purchased Edwin Watts Golf Shops in 2007. It is hoped that the shops will continue to operate until the Chapter 11 proceeding is concluded. To that end, the company secured a loan from PNC Bank in the amount of $38 million.
The president and CEO of the company issued a press release stating that the company's financial troubles arose due to lackluster weather and a less-than-encouraging outlook for the golf industry. Prior to filing for bankruptcy, the company shopped for potential buyers and still hopes to reach a sales agreement before the end of December. One potential buyer could be the company's co-founder and namesake, Edwin Watts, as part of a group of investors.
The company sells golf equipment in a catalog, online and in approximately 90 stores located throughout the United States. The bankruptcy filing listed the company's assets at between $100 and $500 million. Most of these stores are located throughout the southeastern states. If the company is sold, it is anticipated that some of these stores may close. The total amount of the company's debts was not disclosed; however, at least $50 million is owed to PNC Bank.
When a business is unable to pay its debts, filing for Chapter 11 bankruptcy protection may offer some relief. A bankruptcy attorney may be able to assist with negotiating debts, seeking investors or pursuing a sale of the business's assets. If necessary, an attorney may also be able to file for bankruptcy in an effort to keep the company from going out of business while it seeks to resolve its financial problems.
Source: Golf Digest, "Seeking sale, Edwin Watts Golf Shops files for bankruptcy", Brendan Mohler, November 05, 2013