The SPH companies, which include the subsidiaries Specialty Packaging Group, Cosmetics Specialties, Cosmetics Specialties East, Cosmolab and Cosmolab East, intend to conduct business as usual during the Chapter 11 proceeding while they undertake to sell their assets, it was said in a statement.
In order to ensure the continued payment of employee wages and benefits and to honor existing customer programs, SPH has announced the arrangement of a debtor-in-possession facility that will be presented to the United States Bankruptcy Court for approval.
Sale of assets
It was also announced that Several SPH companies have entered into an agreement to sell substantially all of their operating assets to All4 Cosmetics, a subsidiary of Schwan-Stabilo Cosmetics.
As part of this agreement, All4 will acquire the operational assets of Cosmolab, and intends to continue the company’s operations in Tennessee.
Before the sale of these assets can be finalized however, the sellers must seek Court approval to market them, and All4’s offer is also subject to competitive bidding during the auction process.
Michael Musso, Chief Restructuring Officer for SPH said in a statement: “Schwan-Stabilo is one of the most respected companies in the industry. We believe this acquisition will strengthen both companies and provide their customers with the highest quality and most innovative products available.”
It was recently announced that the jars and closures assets of another of SPH’s subsidiaries, Cosmetic Specialties, has been acquired by private Equity firm Asparron Capital.
Tough time for US cosmetics companies
As a result of tough economic conditions, many cosmetics and personal care companies in the US have been hard hit as a result of falling sales.
In 2009, both Crabtree & Evelyn and Jane & Co, a provider of personal care products, filed for Chapter 11 bankruptcy in the US.