Hardware Retailing The Industry's Source for Insights and Information
(Disclosure: NHPA, which publishes Hardware Retailing and Paint & Decorating Retailer magazines, is among the vendors involved in theTrue Value bankruptcy claims.)
As the True Value Company LLC bankruptcy and sale to Do it Best continues to move forward, several creditors have filed reclamation notices, demanding the return of goods delivered by the creditors and received by True Value. Reclamation is the right of a seller to take back goods sold to a buyer or receive payment for those goods.
Most notably, on Oct. 28, Black & Decker served a written demand for reclamation of goods, which was served automatically through the court’s electronic filing system on Nov. 7. In the reclamation letter, Black & Decker attorney Emily Devan shared that the value of the goods subject to the reclamation was no less than $4,362,114, and these goods were received by True Value in the ordinary course of business on or after Aug. 30.
Other creditors that have served reclamation notices include Rohm and Haas Chemicals LLC, which served the notice on Nov. 1 and electronically filed on Nov. 5 for raw materials for paint products and other goods totaling $432,196. On Nov. 1, JS Products Inc. filed for $670,248 and The Toro Company for $61,370. National Diversified Sales Inc. served notice on Nov. 1 and electronically filed on Nov. 4 for goods totaling $55,724.18. On Nov. 4, Multiquip Inc. filed reclamation for goods totaling $97,133, RK West LLC filed reclamation for $24,487 and ITM Co. LTD filed for $109,203.
True Value Awards Bonuses to Execs Prior to Bankruptcy
As part of the bankruptcy proceedings, True Value released a Statement of Financial Affairs, which documented that True Value paid ACON Equity Management, which holds a 70% majority stake in True Value, $1,145,099, plus dividend payments of $329,066 from Oct. 13, 2023, to Oct. 14, 2024, which represents one full year prior to the Oct. 14 bankruptcy filing.
During the same period, True Value CEO Chris Kempa received $142,037 in executive incentive plan payments and a $568,150 retention bonus prior to filing for bankruptcy. In addition, seven other True Value execs received $1,443,635 in retention bonuses and executive incentive plan payments from Oct. 13, 2023 to Oct. 14, 2024. True Value has paid lawyers, management advisors and other related professionals almost $16 million in fees during the past 12 months.
In the 90 days prior to filing for bankruptcy, $183,348,198 was paid to creditors. The list of claims has now reached 893, totaling $92,910,565, with $87,808,613 in unsecured debt.
The Schedules of Assets and Liabilities for True Value Company, filed on Nov. 5, documents total liabilities of $634,999,653.
Key Dates Moving Forward
- Nov. 8: Bid deadline and sale objection deadline
- Nov. 11: Date the auction would take place if there is a qualifying bid (other than the current bid by Do it Best)
- Nov. 12: Sale hearing
- Nov. 15: Deadline for Do it Best to make written offers of employment to True Value employees
- Nov. 18: Cure objection deadline
- Nov. 20: Contract designation deadline
- Nov. 22: Target closing date
- Nov. 25: Section 341 Meeting
- Dec. 4: Assumption/Assignment/Cure hearing
- Dec. 5: Proof of Claim filing deadline
Follow along with all of the True Value bankruptcy and sale news:
- True Value Temporarily Suspends Drop Ship Program
- True Value and Lenders Reach Milestone Agreement Moving Sale to Do it Best Forward
- True Value RDCs Prepare for Potential Shutdown
- Judge Shares Concerns With Direction of True Value Bankruptcy Filing
- Bankruptcy Judge Allows True Value to Use Cash Collateral While Lenders Push Back
- Industry Reacts to True Value Bankruptcy and Potential Sale to Do it Best
- NHPA Offers Tools, Reassurances to Retailers Potentially Impacted by True Value Bankruptcy
- Do it Best CEO Adds New Insights to True Value Purchase Plans
- True Value Files for Chapter 11 Bankruptcy, Do it Best Bids to Acquire Assets
