(Bloomberg) — Instant Brands, maker of the Instant Pot pressure cooker and Pyrex glassware, filed for bankruptcy on Monday after high interest rates and the pandemic’s gnarled supply chain drained its cash, making its debts unsustainable.
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The Downers Grove, Illinois-based company listed estimated assets and liabilities of as much as $1 billion in a bankruptcy petition filed in Texas. The Chapter 11 filing allows Instant Brands to keep operating while it seeks approval of a plan to repay creditors.
The company is slated to receive around $133 million in debtor-in-possession financing to fund itself through the bankruptcy process, the company said in a statement. Instant Brands is owned by private equity firm Cornell Capital, which oversees around $6 billion in capital, according to its website.
“After successfully navigating the Covid-19 pandemic and the global supply chain crisis, we continue to face additional global macroeconomic and geopolitical challenges that have affected our business,” Ben Gadbois, the company’s president and chief executive officer, said in the statement.
Over the last three years, the company has faced a “parade of significant macroeconomic and company-specific headwinds,” Adam Hollerbach, the firm’s chief restructuring officer, said in a court filing on Tuesday.
The kitchenware company initially benefited from the pandemic, but the surge in demand ultimately stretched wait times for products, and drove up the cost of goods, according to court papers. Those conditions worsened when a series of crucial Asian ports shut down in 2021.
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Sales and profit started to slide and in a last-ditch effort to stay afloat, the company completed a debt deal in January to raise new money and buy the firm some time. The so-called drop-down transaction — which was infamously pioneered by J. Crew — is a complex debt maneuver that transfers some of its most valuable assets into a new unit.
With its bankruptcy filing, Instant Brands joins a slate of companies that have completed so-called liability management deals in recent months, only to wind up in Chapter 11 anyway. Other major firms that have followed this trajectory include Diebold Nixdorf, Incora and Envision Healthcare.
The Instant Pot pressure cooker, which first launched on Amazon in 2010, enjoyed an explosion of popularity in the following years. Nearly a decade later, the firm was bought by Corelle Brands, known for its kitchen products including Pyrex and Snapware.
The case is Instant Brands Acquisition Holdings Inc., 23-90716, US Bankruptcy Court, Southern District of Texas.
(Adds additional context from court papers throughout.)
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