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.
(Reporting by Jonathan Stempel in New York, editing by Martha Graybow)