Edwin Watts Golf Shops Files for Ch. 11; Cites Decreased Participation in Sport
Nov. 7 –EWGS Intermediary LLC and its affiliate Edwin Watts Golf Shops filed for Chapter 11 protection Nov. 4 in the U.S. Bankruptcy Court for the District of Delaware (In re EWGS Intermediary LLC, Bankr. D. Del., No. 13-12876, petition filed 11/4/13).
According to court documents, the Fort Walton Beach, Fla.-based debtor is among the premier specialty golf retailers in the southeastern United States. The debtor was founded in 1968 and maintains 91 retail outlets, three pro shops, an e-commerce site, and conducts catalog/direct mail sales. Poor golfing weather in 2013 and limited consumer spending has had a negative impact on the golf industry in general. These factors were compounded for the debtor by increased competition from both big box and specialty retailers, failed product launches on the part of its suppliers, and a recent downturn in participation in the sport, resulting in the debtor’s inability to maintain sufficient liquidity.
The debtor plans to continue to operate a significant number of its stores, according to a Nov. 4 press release. The release further provides that the debtor intends to sell its assets in connection with the reorganization. The release states that “The [c]ompany and its advisors have been in advanced negotiations with multiple parties, prior to the bankruptcy filing, and expect to file sale agreement documents with the [c]ourt shortly. All parties involved hope to have a [c]ourt approved sale transaction closed before the end of the year.” Court documents indicate that the debtor plans to enter into a sale agreement with Gwne Inc. as a stalking horse purchaser.
Court documents state that the debtor has between $100,000,001 and $500 million in estimated assets and between $10,000,001 and $50 million in estimated liabilities.
The creditors with the largest unsecured claims and the amounts of those claims are: Callaway Golf Co., $4,634,931; Taylor Made-Adidas Golf Co., $3,824,169; Titleist, $3,188,728; Nike USA Inc., $1,789,495; Footjoy, $1,544,838; Cobra Puma Golf Inc., $1,540,281; Adams Golf Ltd., $1,186,851; Cleveland Golf Co., $1,085,187; Fifth Third Bank, $732,231; Karsten Manufacturing Corp., $694,898; Wilson Sporting Goods, $671,917; Mizuno Golf Co., $384,100; Tigershark Golf, $366,767; Sean Smith, SDS Retail Operations Inc., $314,166; Bridgestone Sports/Precept, $310,433; Bushnell Outdoor Products, $305,705; U.S. Kids Golf LLC, $256,276; Oakley Sales Corp., $220,147; Heavy Putter LLC, $173,936; J & M Golf, 164,445; Pride Manufacturing Co. LLC, $162,826; Deca International Corp., $161,630; Seemore Putter Co., $151,507; Tour Edge Golf Mfg. Inc., $149,161; and Garmin International, $135,733.
The debtor is being represented by Domenic E. Pacitti of Klehr Harrison Harvey Branzburg LLP, Wilmington, Del.
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The Chapter 11 petition is available at: http://www.bloomberglaw.com/public/document/EWGS_Intermediary_LLC_Docket_No_113bk12876_Bankr_D_Del_Nov_04_201/1