BOCA RATON, Fla. - Sunbeam Corp. said Tuesday that it has reached an agreement with creditors to file a voluntary petition for bankruptcy protection. The beleaguered maker of small appliances said that Bank of America Corp., First Union Corp., and Morgan Stanley Dean Witter & Co. - agreed to support the company through the reorganization by providing a new $285 million line of credit.
Sunbeam said it will file a Chapter 11 reorganization plan in the U.S. Bankruptcy Court for the Southern District of New York, and it expects to emerge from protection in six to nine months.
The reorganization plan, which covers Sunbeam's operating subsidiaries and affiliates, would include converting a substantial portion of the existing bank debt into term debt, convertible debt, and equity interests in the reorganized Sunbeam.
"Chapter 11 reorganization provides a legal framework that allows us to keep the business running normally while we put our financial house in order," Jerry W. Levin, the company's chairman and chief executive officer, said in a press statement. "When we emerge from the proceedings in a matter of months, Sunbeam will be a stronger, more competitive company."
Sunbeam said it expects no interruptions in production or distribution. All vendors of the operating businesses will continue to be paid in full.