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Handy Hardware Files Chapter 11, Wells Fargo to Provide $30MM in Bankruptcy Financing

January 15, 2013, 08:02 AM
Filed Under: Bankruptcy

Handy Hardware Wholesale, a Houston-based company formed by independent retailers, filed for Chapter 11 bankruptcy. According to the filing, the company noted expansion into a second distribution center during recession times hurt its bottom line.

Handy Hardware owes $14.6 million to secured creditor Wells Fargo, which has agreed to extend $30 million in bankruptcy financing to refinance the existing debt and provide $15.4 million in new financing.

In order to expand its business throughout the southeastern U.S., Handy Hardware built a 460,000 square-foot warehouse in Meridian, MS, in 2009, according to documents filed with the U.S. Bankruptcy Court in Wilmington, DE. That facility increased costs at the same time its business was being impacted by the poor U.S. economic climate, driving in 2011 a loss of $8.4 million.

Handy Hardware was formed in 1961 and has 1,000 members, who wholly own the company. According to court documents, the company's assets consist of $38 million in inventory, its warehouse facilities, accounts receivable and equipment.

The company said it hopes to emerge from Chapter 11 still a member-owned company that has "right sized" operations and reduced bond debt.

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