By Jonathan Stempel
Nov 13 (Reuters) - AMF Bowling Worldwide Inc, the world's
largest bowling alley operator, on Tuesday filed for bankruptcy
protection for the second time in 12 years, saying recent
economic weakness has cost it business and left it with an
unmanageable debt burden.
The Mechanicsville, Virginia-based company said it has
agreed on a plan to significantly reduce its debt and turn over
control to its lenders, enabling it to emerge from Chapter 11
before the end of April 2013.
AMF and 15 affiliates sought protection from creditors in
the U.S. bankruptcy court in Richmond, Virginia. It said it had
between $100 million and $500 million of both assets and
liabilities.
The company said it operates 270 bowling centers in the
United States and Mexico - more than three times as many as its
nearest rival. It also said it has more than 20 million
customers a year and employs about 7,000 people.
AMF Chief Financial Officer Stephen Satterwhite said in a
court filing the company has been unable to sufficiently reduce
costs to combat falling revenue, amid a 36 percent decline in
large U.S. bowling league memberships since 1998.
"Unfortunately for AMF, the lasting effects of the recession
and economic downturn have proven too difficult to overcome," he
said.
Satterwhite said AMF had hired Moelis & Co to help sell its
assets, but that the efforts proved unsuccessful as purchasers
expressed concern about restrictions under lease agreements with
iStar Financial Inc, AMF's main landlord.
The restructuring calls for Credit Suisse AG and other
first-lien lenders to convert their claims into all the equity
in a reorganized company, and for modifications to be made to
the iStar leases, court papers show.
Lenders would also provide $150 million of financing to help
AMF operate after emerging from Chapter 11.
AMF said it has lined up $50 million of financing to keep
operating now, and that customers should see no difference.
The company also said its restructuring is subject to better
offers from third parties in a court-supervised sales process.
AMF's roots date to 1900, when it was known as American
Machine & Foundry Co and made equipment for the tobacco
industry.
The company in 1946 introduced the automated pinspotter,
which allowed the bowling pins to be reset automatically rather
than by hand. For many years, AMF also sold recreational
products such as Ben Hogan golf clubs and Harley-Davidson
motorcycles.
AMF had previously filed for protection from creditors in
July 2001 and emerged from bankruptcy the following year.
The case is In re: AMF Bowling Worldwide Inc, U.S.
Bankruptcy Court, Eastern District of Virginia, No. 12-36495.
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