Leslie’s, Inc. a pool and spa care retailer, has filed for Chapter 11 bankruptcy protection. According to the company, the prearranged restructuring is intended to reduce debt and provide greater financial flexibility.
The Phoenix-based company has entered into a Restructuring Support Agreement with current lenders and plans to remove around 90% of its funded debt. It also seeks to obtain $150 million in new capital.
Note: A Chapter 11 bankruptcy filing is a legal process that allows a business to reorganize its debts, restructure obligations, and continue operating while working toward financial stability. Under Chapter 11, a debtor typically proposes a plan to repay creditors over time, subject to court approval. A Chapter 11 filing does not necessarily mean a business is closing or going out of business. For additional information, readers are encouraged to contact the business directly.
Leslie’s, Inc. Begins Prearranged Chapter 11 Restructuring
According to an official press release, the company entered into a RSA with an existing lending group on September 30. More than 80% of the existing lenders supported the agreement, which presents the financial and operational restructuring plan of the retail company.
As part of the restructuring, the company has committed to $60 million in equity financing and $90 million in new-money debtor-in-possession (DIP) financing. Certain RSA parties have fully supported the equity financing.
Leslie’s, Inc. has also filed voluntary petitions for prearranged Chapter 11 cases in the U.S. Bankruptcy Court for the Southern District of Texas. It expects to conclude the proceedings in early 2027.
As per the proposed restructuring, after the company exits from Chapter 11, a group of existing lenders is expected to become its majority owner.
Case Related Details
Court records on Pacermonitor show that Leslie’s, Inc. filed several emergency “first-day” motions on September 30. These motions were tied to continued payment of employee wages and benefits, insurance coverage, and customer programs.
The motions were also related to cash-management systems and bank accounts, certain vendor and other prepetition claims, utilities, taxes, and other operational matters.
Filing records added that the Phoenix company also asked the court to authorize post-petition financing and the use of cash collateral. The financing motion seeks authority to obtain post-petition financing and provide enough protection to prepetition secured parties.
The motion also sought to grant certain senior secured liens and superpriority administrative expense status to financing providers.
The records further show that certain affiliates of Leslie’s, Inc. have made their separate filings as well. These debtors will request the court for a joint administration of their cases:
- Cortz, Inc.
- Horizon Spa & Pool Parts, Inc.
- Hot Tub Works, LLC
- Leslie’s Poolmart, Inc.
- LPM Manufacturing, Inc.
- Pool Parts, Inc.
- RAM Chemical & Supply, Inc.
- SPP Holding Corporation
- Stellar Manufacturing, LLC
PACER records add that the company’s petition includes a consolidated list of creditors with the largest unsecured claims. Some of these unsecured creditors are Innovative Water Care Global Corp, Echo Global Logistics, Bio Lab, Inc., Westbay LLC, and Diamond Chemical Company LLC.
A summary of Chapter 11 petition is shared here:
- Filing Date: September 30
- Court and Jurisdiction: U.S. Bankruptcy Court for the Southern District of Texas
- Type of Filing: Active, Voluntary Petition
- Chapter: 11
- Case Number: 26-90795
- Estimated Assets: Between $0 and $50,000
- Estimated Liabilities: Between $0 and $50,000
- Estimated Creditors: 1-49
The company has appointed several advisors in connection with the restructuring. Simpson Thacher & Bartlett LLP and Haynes and Boone, LLP are the legal advisors. BRG, LLC is the company’s financial and restructuring advisor.
Centerview Partners LLC is serving as investment banker, and C Street Advisory Group is the strategic communications advisor. Hilco Global serves to assist the company in its real estate portfolio.
Operations to Continue During Chapter 11
Jason McDonell, the company’s CEO, shared details regarding the operational status of Leslie’s, Inc. As per the statement, the company remains fully operational and will keep serving customers through its physical stores and digital platforms.
The press release adds that all gift cards and loyalty program benefits will continue to be honored.
The retailer is seeking approval of a $90 million DIP facility from a group of its existing lenders. It is also seeking approval for a fully committed $225 million DIP asset-based financing facility from its existing ABL lenders. Bank of America, N.A. has appeared in the case in connection with the DIP ABL financing.
These financing arrangements, once approved by the court, could provide the required liquidity to support its operations throughout the court-guided proceedings.
Leslie’s Announces 76 Store Closures
Alongside the restructuring, the company shared that it would shutter 76 stores to readjust its retail footprint.
Leslie’s, Inc. added that all remaining stores outside those recently closed remain open and fully operational. It will continue reviewing its stores and properties during the proceedings to ensure its store network meets the company’s long-term needs.
Founded in 1963, the company currently operates more than 900 physical locations along with a digital platform. It serves residential customers and pool professionals across the country. Offerings include pool cleaners, clarifiers, spa covers, water balancers, pool filters, and other products.
As the case moves ahead, Leslie’s, Inc. is expected to continue operating its stores and digital platforms and emerge from bankruptcy by next year.
