Court OKs Nortek's Prepackaged Chap. 11

By Joseph Palenchar -- TWICE, 12/7/2009

Providence, R.I. - The U.S. Bankruptcy Court for the District of Delaware approved Nortek's prepackaged Chapter 11 filing, the company said.

"Nortek expects to emerge from bankruptcy as a reorganized company as expeditiously as possible," the owner of multiple custom-installation companies said in a prepared statement.

The plan will eliminate about $1.3 billion out of a total $2.05 billion in debt, the company said. Nortek also has a commitment for a $250 million asset-backed credit facility that will be available for general business operations after the company emerges from Chapter 11. Nortek previously stated that it has no plans to sell any of its subsidiaries and anticipates no Nortek management changes.

In late October, the court approved multiple Nortek requests, including permission to pay trade creditors any balances incurred before the Oct. 21 Chapter 11 filing, pay all salaries and wages to employees, honor all customer programs and product warranties, and continue to use cash on hand for general business operations.

Nortek owns multiple companies that sell products for commercial and residential installation. In home technology, the company's brands include many of the major powers in the residential custom-install industry, such as Aton, Channel Plus, Elan, Gefen, Imerge, M&S, Niles, OmniMount, Panamax, SpeakerCraft, Sunfire and Xantech. The company also owns residential HVAC and ventilation companies and commercial HVAC suppliers.