Sunbeam Files for Bankruptcy

Sunbeam(SOC Quote) filed for bankruptcy reorganization today and received $485 million in credit commitments, enabling the company to continue its operations.

The Boca Raton, Fla., home appliance maker said it expects to complete the Chapter 11 reorganization, which will free it from bank debt and litigation expenses, in six to nine months.

The company also said it received a new $285 million line of credit from Bank of America, First Union and Morgan Stanley. In addition, Sunbeam received a commitment from GE Capital for a $200 million accounts receivable financing program, which goes to the company's domestic businesses.

Last November, Sunbeam said an investigation by the Securities and Exchange Commission, dating back to June 1998 and regarding its accounting practices, had ended.

In March 1998, Morgan Stanley, First Union and Bank of America, which later merged with NationsBank, underwrote a $1.7 billion loan for Sunbeam's acquisitions of consumer-products companies Coleman, Signature Brands and First Alert. By June 1998, the three lenders found it difficult to parcel out the loan as Sunbeam's accounting practices were questionable.

Shares of the company haven't opened for trading today, but closed yesterday at 51 cents on the New York Stock Exchange. The 52-week low is 25 cents, and the high for the year is $6.06.