Select Staffing file for backruptcy
The family-owned company is seeking a quick restructuring by way of a pre-packaged restructuring plan, for which it has already secured the support of many of its lenders. The plan would raise $225 million in new equity capital and $470 million in new debt to pay its creditors and continue funding its operations.
Court papers show that under the plan, Select Staffing's senior lenders would trade the $492 million in principal and interest they're owed for $365 million in cash and the ability to participate in a $175 million rights offering of new common stock.
Junior lenders owed $159 million in principal and interest would receive $12 million in cash and warrants to buy new common shares. Unsecured claims would be reinstated and paid according to their terms under the plan.
The plan would cancel existing equity, although it provides means for them to acquire new common shares. Select Staffing's parent company is 96% owned by the Sorensen trust, which court papers identify as an affiliate of Select Staffing chairman and chief executive D. Stephen Sorensen. His brother, Paul Sorensen, owns the remaining shares and is Select Staffing's president.
Court papers show that the holders of 87% of Select Staffing's senior debt and all of its junior lenders have voted in favor of the plan, which is subject to the approval of the U.S. Bankruptcy Court in Wilmington, Del.
In connection with the reorganization, Select Staffing would acquire Decca Consulting Inc., a staffing firm which works with employers in the energy industry. It would also get the right to purchase Butler America Inc., a staffing firm that specializes in technical services.
Founded in 1985, Select Staffing, of Santa Barbara, Calif., now has more than 300 owned and franchised locations in 48 states at which it employs about 75,000 full- and part-time employees. It works with employers in such industries as accounting, finance and information technology.
Last year, Select Staffing found assignments for about 300,000 temporary employees and reported $2 billion in gross revenue.