Wisconsin-Based Catalog Printing Powerhouse Arandell Files Chapter 11 Bankruptcy
Just on the heels of closing its Walton, Ky., printing plant the end of July, Arandell Holdings announced that the printing company, along with all its subsidiaries, voluntarily filed for business reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware on Aug. 13. According to the Menomonee Falls, Wis.-based catalog printing specialist — which serves U.S. retailers and online merchandisers — Arandell has sufficient liquidity to continue operating its business.
“Given fundamental changes in the industry resulting from COVID-19 and other factors, company management is taking proactive and aggressive steps to improve the organization’s overall business framework, while continuing to pursue new business opportunities,” Brad Hoffman, Arandell’s chairman, president, and CEO, said in a prepared statement.
Specifically, Arandell has been impacted by store closings and supply chain disruptions resulting from the COVID-19 pandemic, in addition to the growing e-commerce marketplace and its impact on retailers. Arandell claims to operate the nation's single largest web offset catalog production facility, printing more than one billion catalogs per year.
Arandell Corp. was ranked No. 51 on the 2019 Printing Impressions 400, reporting most recent fiscal year sales of $103 million. It is ranked only behind Sussex, Wis.-based Quad, which reported $629.1 million in catalog revenues. Arandell's roots date back to 1922 as R&L Lithography in Milwaukee. It merged with the E.F. Schmidt Co. in 1981, and entered the catalog printing market in 1984 with its first major client, Neiman Marcus. Hoffman purchased Arandell from the Treis family in 2016.
“We’re continuing business operations as usual," Hoffman added. “Our leadership team is continuing to evaluate the best path to creating a more sustainable capital structure.” The company is currently engaged in discussions regarding strategic alternatives and the terms of a potential financial restructuring plan.
Arandell Receives $31.5M 'DIP' Financing Commitment
Arandell indicated it has received commitments for $31.5 million in debtor-in-possession (“DIP”) financing from certain of its revolving lenders, along with an accounts receivable factor subject to the satisfaction of certain closing conditions. Following court approval, this financing, combined with cash on hand and generated through its ongoing operations, is expected to be sufficient to support the operational and restructuring needs, the company indicated.
According to its Chapter 11 court filing, the 15 largest unsecured creditors include the GCIU ($98.6 million) and GCC/IBT ($76.2 million) union pension funds; a U.S. SBA Paycheck Protection Plan (PPP) loan ($7.8 million); Carol Stream, Ill.-based Horizon Paper ($5.2 million); Los Alamitos, Calif.-based Trend Offset Printing Services ($1.9 million); Palatine, Ill.-based Hubergroup ($607,570); Appleton, Wis.-based Progressive Converting ($605,324); Milwaukee-based Burton & Mayer ($570,933); Cleveland-based LSC Communications ($403,331); Chicago-based Midland Paper ($352,635); Dallas-based Pinwheel Logistics ($303,668); Itasca, Ill.-based Continental Web Press ($300,605); Beverly Hills, Calif.-based Fairmont Logistics ($250,724); Minneapolis-based Smyth ($216,493); and Milwaukee-based WE Energies ($211,774).
“The support we are receiving from our lenders through this process will help us to manage through these unprecedented near-term challenges as well as position Arandell for the future,” Hoffman noted. “On behalf of the entire Arandell organization, I would like to thank all of our employees for their unwavering dedication to our mission and to operating safely.”
Additional Information regarding Arandell’s restructuring is available at www.arandellrestructuring.com. Court filings and information about the claims process are available at www.bmcgroup.com/arandell. Steinhilber Swanson LLP is serving as legal advisor, Promontory Point Capital LLC as financial advisor, and Harney Partners LLP as its restructuring advisor.