Sunbeam out of Ch. 11 with new name, structure
December 23, 2002,
Automatic blanket and consumer products producer Sunbeam Corp. has emerged from bankruptcy and a painful restructuring 22 months after being forced to seek Chapter 11 protection, a dark cloud hanging over the company after the highly controversial stewardship of former ceo "Chainsaw" Al Dunlap and charges of financial fraud.
The new company will be known as American Household Inc. and will operate three subsidiaries: The Coleman Co., Sunbeam Products Inc. and First Alert/Powermate Inc.
The company's reorganization plan had been confirmed by a U.S. bankruptcy court in the southern district of New York last month. Under the terms of the bankruptcy settlement, virtually all of the company's bank debt was converted into new stock in the company.
Major stock holders now are former creditors Morgan Stanley, Wachovia Bank, Bank of America and Oaktree Capital.
Accompanied by a blare of bad publicity and shareholder lawsuits, Sunbeam was forced into bankruptcy after taking on a crushing debt load to finance a string of acquisitions under former ceo Dunlap, dubbed "Chainsaw Al" for his brutal cost-cutting techniques and widespread layoffs. Dunlap was ultimately fired in 1998 and in September reached a settlement with the Securities and Exchange Commission in which he agreed to pay $500,000 to settle charges he concealed Sunbeam's financial problems with questionable accounting techniques. Dunlap was also barred from serving ever again as an officer or director of a public company.
Under the new American Household umbrella, Jerry Levin, who steered the company safely through its restructuring, will remain chairman and ceo and will invest $3 million in the company in exchange for new shares in American Household. Levin offered "sincere thanks to the vendors and customers who gave their support and cooperation. I am very pleased that we have emerged from Chapter 11 as a stronger, more competitive enterprise."
Shares in the new company, American Household, are currently trading on the "Pink Sheet" market.