Tupperware regains access to cash for upcoming payroll
By Dietrich Knauth
NEW YORK, Sept 25 (Reuters) -Tupperware Brands Corporation on Wednesday reached a short-term deal with lenders opposed to its bankruptcy strategy, restoring the food container maker's access to cash accounts and allowing it to meet employee payroll and other upcoming expenses.
The Orlando, Florida-based company filed for bankruptcy protection on September 17, with $818 million in debt and a plan to sell the company.
Tupperware faces opposition from a faction of lenders that would prefer to foreclose on the company's assets outside of bankruptcy. Those lenders had initially cut off Tupperware's access to $7.4 million in cash that the company had pledged as collateral on its debt.
Tupperware attorney Spencer Winters said at a court hearing in Wilmington, Delaware, that the company is trying to reach a longer-term settlement with its lenders. In the meantime, the lenders have consented to allow Tupperware to spend its cash on payroll and other routine expenses until Oct. 11, Winters said.
U.S. Bankruptcy Judge Brendan Shannon, who is overseeing the case, approved the short-term agreement at the hearing, encouraging the parties to continue negotiations and avoid disruption to Tupperware's employees and independent sales representatives.
Tupperware has 5,450 employees and a salesforce of 465,000 independent contractors who earn a commission from their sales of Tupperware products, according to the company's court filings. In 2023, Tupperware paid $2.6 million per month in employee wages and an average of $2.4 million a month in sales commissions.
The company attributed its bankruptcy to a years-long slump in sales, saying it relied too heavily on independent sales representatives instead of selling online or in retail stores.
Tupperware attorney Gabriela Hensley told Shannon that the company had thus far managed to avoid any late payments to its employees or sales force, because it had prepaid some wages and commissions before filing for bankruptcy.
Tupperware will return to bankruptcy court on October 11 to request a longer-term court order that allows it to maintain access to its cash accounts.
The case is In Re Tupperware Brands Corp, U.S. Bankruptcy Court for the District of Delaware, No. 24-12156.
For Tupperware: Spencer Winters and Gabriela Hensley of Kirkland & Ellis
For the ad hoc group of lenders: Allan Brilliant of Dechert
Read more:
Tupperware - from a US household brand to an indebted kitchenware maker
Tupperware files for bankruptcy as its colorful containers lose relevance
Tupperware lenders oppose company's proposed bankruptcy sale
Reporting by Dietrich Knauth
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