Richard L. Bready, Chairman and CEO
Edward J. Cooney, Vice President and Treasurer
(401) 751-1600
IMMEDIATE
NORTEK, INC. RECEIVES COURT APPROVAL FOR FIRST DAY MOTIONS
AND TO PAY TRADE CREDITORS IN FULL IN THE NORMAL COURSE
Plan Confirmation Hearing Scheduled for December 4, 2009
Exit Financing in Place and Motion to Use Cash Collateral Approved
PROVIDENCE, RI, October 23, 2009—Nortek, Inc. (“Nortek”) today announced that it and its domestic subsidiaries (together, the “Debtors”) received approval from the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) of several first-day motions, including interim authorization to pay trade creditor balances that were incurred prior to the Debtor’s chapter 11 filings on October 21, 2009. New trade balances will be paid in the ordinary course of business. The Bankruptcy Court also authorized the Debtors to pay all salaries and wages to their employees earned and unpaid as of the filings. The Court also approved the Debtor’s ability to honor all customer programs, including product warranties, in the ordinary course of business. In addition, the Bankruptcy Court approved an order authorizing the Debtors to use their cash on hand for the operation of business in the normal course. As of the date of the filings, Nortek and its subsidiary companies had cash on hand of approximately $125 million.
As previously announced, Nortek has obtained a commitment for a $250 million asset-backed credit facility which will be available when the Debtors emerge from bankruptcy.
Additionally, the Bankruptcy Court scheduled the confirmation hearings for the Debtors’ prepackaged plans of reorganization (the “Prepackaged Plans”) for December 4, 2009. Accordingly, the Debtors expect to emerge from bankruptcy by year-end.
“We are pleased that the Bankruptcy Court has granted these authorizations so that we can operate our business in the normal course without disruption while we complete this expedited ‘prepackaged’ chapter 11 process”, said Richard Bready, Chairman and Chief Executive Officer. “The liquidity resulting from our ability to use our cash on hand and cash flow from operations will be more than adequate to fund our projected cash needs.”
Nortek (through its subsidiaries) is a leading diversified global manufacturer of innovative, branded residential and commercial ventilation, HVAC and home technology convenience and security products. Nortek offers a broad array of products including: range hoods, bath fans, indoor air quality systems, medicine cabinets and central vacuums, heating and air conditioning systems, and home technology offerings, including audio, video, access control, security and other products.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this discussion and throughout this document, words, such as "intends", "plans", "estimates", "believes", "anticipates" and "expects" or similar expressions are intended to identify forward-looking statements. These statements are based on Nortek's current plans and expectations and involve risks and uncertainties, over which Nortek has no control, that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual future activities and operating results to differ include the availability and cost of certain raw materials (including, among others, steel, copper, packaging materials, plastics and aluminum) and purchased components, the level of domestic and foreign construction and remodeling activity affecting residential and commercial markets, interest rates, employment, inflation, foreign currency fluctuations, consumer spending levels, exposure to foreign economies, the rate of sales growth, price, product and warranty liability claims, any amendments to the Prepackaged Plans, whether or not the Prepackaged Plans are confirmed by the bankruptcy court, and whether or not Nortek and its domestic subsidiaries conclude their chapter 11 cases in the anticipated timeframe or at all. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Nortek undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to Nortek or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Readers are also urged to carefully review and consider the various disclosures made by Nortek, herein, as well as its periodic reports on Forms 10-K, 10-Q and 8-K, filed with the Securities and Exchange Commission.
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