Oreck vacuums started as a family business back in 1963. Forty years later, the family sold the company to a private equity firm. By 2013, the vacuum maker was grappling with declining sales due to tough competition and distribution difficulties. Ultimately, those in charge of the business filed for Chapter 11 protection under business bankruptcy laws and the Tennessee-based company went on the auction block.
In an effort to reclaim the business, the Oreck family joined forces and collected approximately $22 million dollars to offer the first bid for the flailing firm. However, it wasn’t enough. Royal Appliance Manufacturing Co. moved in with a higher bid and swept up the vacuum-cleaner maker.
This is just the type of difficult bankruptcy situation that benefits from the guidance of an expert legal professional. Understanding the ins and outs of Chapter 11 and bankruptcy auction as well as obligations under pre-bankruptcy contracts and debt settlement can be complicated. Seeking legal guidance is the best way for business owners to ensure they can continue in operation.
Like many business owners who face a challenging economic market, the son of Oreck’s founder hopes only to help the company become successful once again. Whether that will happen under the guidance of Royal or whether it will be the responsibility of the Oreck family is still pending. The $24 million-plus bid from Royal still requires a judge’s approval before the sale is final.
For some, when a business files for bankruptcy it may include protection from foreclosure and repossession. For others, like the Oreck family it may be about something more.
Source: USA Today, “Hoover parent snaps up Oreck at auction,” G. Chambers Williams III, July 9, 2013
