Posted by: Diane Capuano
Via Press Releases:
Debtor-in-possession financing to be provided by the company’s existing senior lender
Merit working to consummate a sale or strategic investment in the next 90 days
The Merit Group, which does business as Lancaster and Five Star, has announced that it has filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the District of South Carolina.
The company has obtained a commitment for a $55 million debtor-in-possession facility from its senior lender, Regions Bank. This facility will allow Merit to continue operations without interruption during the reorganization process, while its management team and advisors focus on a potential sale of the business or a strategic investment in the next 90 days.
“For over 58 years, Merit has served the needs of the paint sundries industry through its commitment to premier service and product diversity,” said Mitch Jolley, who recently returned to his role as President and Chief Executive Officer in April. “This next step will allow the organization time to evaluate all alternatives to position Merit for future success.”
The company has retained Alvarez & Marsal as its financial advisors and Morgan Joseph TriArtisan as its investment banker. Its principal bankruptcy attorneys are the McNair Law Firm, and its claims agent is Kurtzman Carson Consultants.
Jolley returned to the CEO role in April. He previously served as CEO from 1990 to 2009. Mitch replaces Jay Baker, who served as CEO since October of 2009.
The Merit Group Inc., a South Carolina corporation, was founded as Lancaster Supply in 1953, and now operates a nationwide distribution network in the paint sundries industry. Merit is the largest distributor of paint sundry products in the United States, with a national footprint including distribution centers in South Carolina, Florida, Texas, California, Utah, Kentucky, New Jersey and New York. Merit’s corporate headquarters are located in Spartanburg, S.C., and it employs approximately 325 employees.
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