August 14, 2012
By John Clark
Prince Sports, a tennis racket manufacturer whose clients include Maria Sharapova, Jimmy Connors and Martina Navratilova, obtained court approval for its proposed bankruptcy plan this week, according to a report from The Star-Ledger.
This week, U.S. Bankruptcy Judge Kevin Carey allowed the Delaware-based company to finalize its restructuring plan, which gives ownership of the company to its creditors.
The approval of the plan allowed Prince Sports to leave bankruptcy just three months after it filed, which is a relatively brisk tour through bankruptcy court for a corporation saddled with millions of dollars in debt.
Under the approved plan, the company’s primary creditor, ABG-Prince LLC, will take over all of Prince’s assets in exchange for the dismissal of more than $67 million in debt.
Lesser creditors, to whom the company owes more than $13 million, will still be able to gather some money from pending lawsuits, but they will only recover less than 3 percent of their loans, according to sources.
While the bankruptcy lawyer who represented Prince didn’t immediately speak to reporters, sources say that the company will give more than $50 million worth of assets to their largest creditor.
The plan, however, may save more than $20 million, as the company owed more than $75 million in debt. Sources indicate that declining demand, caused in part by the recession, and increased competition from overseas tennis racket manufacturer forced the company to file for bankruptcy.
And the bankruptcy sale represents a low point for a company that once revolutionized the way people played tennis. In 1976, Prince invented the first oversized racket, which was significantly larger than previous models and had a much larger "sweet spot" than smaller, wooden rackets.
One year later, the pioneering company invented the first graphite racket, which is still used by many professional tennis players today. In recent years, the company gained extra fame due to its partnership with women’s superstar Maria Sharapova.
Her contract with Prince, however, ended last winter, signaling the beginning of the company’s decline. The company tried to diversify over the years, adding rackets for squash and racquetball, for example, but tennis equipment accounted for more than 80 percent of its total revenue. And when Americans started buying rackets elsewhere, the company quickly folded.
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