Tupperware Lenders Challenge Bankruptcy Sale Procedure Efforts

A group of Tupperware Brands Corp. lenders objected to its latest proposal to solicit bids, saying the fallen food container-maker is trying to strip secured lenders of their right to credit bid.

Tupperware has been unable to solicit a bid that would cover the debt it owes, as the highest offer it received in a 2023 bid process would cover less than 20% of the $817 million in its principal amount outstanding under various credit agreements, the lenders, including Bank of America, said in an Oct. 11 filing in the US Bankruptcy Court for the District of Delaware.

The company’s latest effort to solicit a cash bid would burn up estate resources while standing in the way of a potential takeover transaction with lenders that could could culminate in a profitable company, the lender group said.

“This proposal is too little, too late: the market has spoken, and the value of the Debtors’ assets does not come anywhere close to the total outstanding funded debt,” the lenders said.

The lenders’ objection is the latest in their dispute with the food-storage container company over its future.

The bankruptcy court should reject the company’s proposed bid procedures because they violate the bankruptcy code, the lenders, including hedge funds affiliated with Alden Global Capital, said. There isn’t cause to terminate lenders’ right to credit bid and they don’t consent to the “sale of their collateral,” they

The lenders have urged the Delaware court to dismiss the Chapter 11 case entirely.

Tupperware in a separate Friday filing said the lender group isn’t prepared to take over its assets and that their bid to throw out Tupperware’s bankruptcy could result in an “uncontrolled global shut down” of its business. Uncertainty about the lenders’ ability to credit bid has “chilled progress” in its latest effort to solicit a cash bid, Tupperware said.

The lenders “would prefer to exclude all of the Debtors’ other stakeholders from the restructuring process, take the business and—if a going-concern transaction proves too complicated or expensive—walk away with the brand,” Tupperware said.

Tupperware filed for bankruptcy in mid-September after years of sales declines, operational stress, and recent failures in finding a buyer.

The lenders are represented by Young Conaway Stargatt & Taylor LLP and Dechert LLP. Tupperware is represented by Kirkland & Ellis LLP and Cole Schotz PC.

The case is Tupperware Brands Corp., Bankr. D. Del., No. 24-12156, 10/11/24.