The Container Store filed for Chapter 11 bankruptcy protection late Sunday in the Southern District of Texas, seeking to restructure its debt and address operating losses.
The Coppell-headquartered retailer, which specializes in home organizing solutions, lists $243 million in secured debt but states in its filing that 90 percent of the company’s long-term lenders have pledged to support an in-court recapitalization that provides $40 million of new financing and $45 million of deleveraging. The lenders would take control of the company under the plan.
The Container Store lists $836 million in total liabilities and $969 million in assets.
Container Store Chief Legal Officer Tasha Grinnell selected Latham & Watkins as the company’s lead legal advisor and Hunton Andrews Kurth as local counsel. The company has chosen Houlihan Lokey as its investment banker, FTI Consulting as its financial and communications advisor and A&G Reality as its real estate advisor.
The ad hoc group of lenders has hired Paul Hastings as its legal advisor, Greenhill & Co. as its investment banker and Alix Partners as its financial advisor.
The Container Store was founded in 1978 and operates 104 stores in the U.S. The company reported $799 million in annual revenue last year, with an operating loss of $98.6 million. The New York Stock Exchange delisted The Container Store on Dec. 9. It currently has a market cap of less than $10 million.
In court documents filed Sunday and in a press release, company leaders said they expected to have a restructuring plan in place and confirmed within two months with all unsecured creditors, including vendors and employees, fully paid.
“The Container Store is here to stay,” The Container Store CEO Satish Malhotra said in a release. “Our strategy is sound, and we believe the steps we are taking today will allow us to continue to advance our business, deepen customer relationships, expand our reach, and strengthen our capabilities.”
The slew of first-day bankruptcy documents were filed by Hunton AK bankruptcy partner Tad Davidson.
The case, In re The Container Store, has been assigned to Houston Bankruptcy Judge Alfredo Perez. The case number is SDTX 24-90626.