ArchBrook Laguna Holdings LLC and Subsidiaries
Initiate Voluntary Chapter 11 Filing

  • Company Seeks Authority To Sell Substantially All Of Its Assets Pursuant To A Bankruptcy Auction
  • Secures Commitment On $50 Million Senior Secured, Superpriority Debtor-In-Possession Revolving Credit Facility With GE Capital Commercial Services, Inc.
  • On-Going Business Relationships With Suppliers, Vendors, and Customers Will Not Be Impacted During Chapter 11

Carlstadt, New Jersey, July 8, 2011 – ArchBrook Laguna Holdings LLC (“ArchBrook”) announced today that it, and certain of its affiliates (together with ArchBrook, the “Company”), have filed voluntary petitions for reorganization under chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court in the Southern District of New York. In connection with the restructuring, the Company has filed a motion with the bankruptcy court seeking authority to sell substantially all of their assets pursuant to a bankruptcy auction (the “Sale”). The Company will seek to have the bankruptcy auction held on August 8, 2011.

Concurrently with its chapter 11 filing, the Company has entered into an agreement with GE Capital Commercial Services, Inc. to provide the Company with a $50 million debtor-in-possession financing facility. The Company will use its cash-on-hand and the debtor-in-possession financing to maintain business-as-usual during the restructuring process. The Company believes its current and anticipated cash resources will be suitable to pay its expenses and maintain its business operations until the close of the Sale. Vendors and suppliers should see no change in normal business operations during chapter 11.

The Company is being advised by Macquarie Capital (USA) Inc. with respect to the sale process and by Hawkwood Consulting LLC (“Hawkwood”), whose founder Stephen J. Gawrylewski is Chief Restructuring Officer of the Company.

“After careful consideration of all available alternatives, we determined filing chapter 11 was a necessary and prudent step and in the best interests of our creditors. Furthermore, all signs indicate that an open sale process is the most value-maximizing alternative in these circumstances, and we are hopeful that the process will result in continued operation of the underlying business under new ownership. Our operations will not be impacted during chapter 11 and our customers will continue to receive the highest quality service that they have come to expect from the Company,” said Daniel J. Boverman, Interim Chief Financial Officer of ArchBrook and a Managing Director of Hawkwood. “We greatly appreciate and recognize the support of our employees, customers, vendors and strategic partners whose support is vital to our success.”

The Company is a total solution provider committed to supplying consumer electronics and computer products to the nation’s most successful retailers and e-tailers through state-of-the-art logistical services.

Suppliers, Vendors and other stakeholders can obtain additional information about the reorganization by visiting archbrookrestructuring.com.

This press release contains "forward-looking statements." These statements may be identified by the use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "should," or "will," or the negative thereof or other variations thereon or comparable terminology.

The company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond its control. Some of the key factors that could cause its actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements include the following:
- competitive pressures and trends in the restaurant industry;
- prevailing prices and availability of food, supplies and labor;
- relationships with franchisees and financial health of franchisees;
- general economic conditions and demographic patterns;
- development and expansion plans; and
- statements covering business strategy.

Undue reliance should not be placed on such forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. The company does not undertake and specifically decline any obligation to update any such statements or to publicly announce the results of any revisions to any of such statements to reflect future events or developments.