Hoonigan, formerly knows as Wheel Pros, a maker of after-market specialty auto parts, filed for bankruptcy protection after struggling with inflation costs and a slump in demand.
The Colorado-based company, which announced a rebranding to Hoonigan in 2023, filed for Chapter 11 bankruptcy in Delaware.
It listed assets and liabilities of $1 billion to $10 billion in its petition. Chapter 11 filings allow a company to continue operating while it works out a creditor repayment plan.
The company has entered into a restructuring-support agreement with creditors and expects to cut approximately $1.2 billion of debt, while securing up to roughly $570 million in new capital, according to a separate company statement.
Wheel Pros, founded in 1995 and acquired by Clearlake Capital Group in 2018, had raised $235 million last year in a deal that had favored certain creditors over others.
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Today’s announcement marks an important step forward for Hoonigan that will enable us to advance our industry leading position in the growing automotive aftermarket sector,” said Vance Johnston, CEO of Hoonigan.
“With a significantly strengthened balance sheet and new capital, this transaction will position us to invest in innovation and further drive financial performance.
Hoonigan, the automotive aftermarket company owned by private-equity firm Clearlake Capital, filed for bankruptcy after pursuing an expansion plan that left it saddled with too much debt https://t.co/RSre52jRfY via @WSJ #automotive #bankruptcy #restructuring
— Jodi Xu Klein (@jodixu) September 9, 2024
With the strong support of our financial partners, we remain laser-focused on providing cutting-edge products and best-in-class service to our partners throughout this process.”
The company expects to emerge from Chapter 11 within two months under the majority ownership of a group of its current lenders, according to the statement.
The restructuring pact also provides a motion seeking to approve additional funds including a $110 million term loan debtor-in-possession facility.
As a result, the company said it expects to continue operating during restructuring without impacting trade creditors.
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In addition, Wheel Pros signed an agreement to divest its 4 Wheel Parts retail stores, associated e-commerce sites, and certain other assets, according to another statement.
Is it just me or every company that was bought out by private equity firms goes bankrupt?? Hoonigan filed for bankruptcy yesterday. Donut media will be next. pic.twitter.com/30fPLNTofY
— Classic Car Logic (@Mopar_Logic) September 9, 2024
