http://newsandinsight.thomsonreuters.com/Bankruptcy/News/2012/11_-_November/AMF_Bowling_files_for_bankruptcy_again/

Nov 13 (Reuters) - 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.

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With pricing at $5+ per game, is anybody surprised?

I can take my family to a 3D movie with popcorn and drinks for less than it costs to bowl......and at least the movie will kill 2 hours!

I would think that would be a case for USBC to step in and resolve the situation. Security of the league money is the main selling point of a sectioned league, right?

This also makes me wonder about leagues, like one of mine in an AMF center, that uses the house as the league's bank. That is, all the money for each night is turned over to the house and they put it into their account. At the end of the season, they give the league president and treasurer the money.

What happens to that money, if AMF goes bankrupt before the end of the season. I'm inclined to believe it becomes part of their assets and our league becomes just another creditor.

Charlest

I Think you are missing one point we tried to make. A few years back, from what I was told,  Global bought the AMF300 name from AMF from my understanding. No more deals, the name is Global's to make balls under for however long and Global in theory could sell the name to another company to make balls under...so in that sense, Global would be free and clear because they already own the AMF300 name..

Yep, I missed that. Was sure there was a contract involved. Guess not. Thanks for your patience!!

Edited (11/20/12):
Not that it makes much difference, but I was right. Just got it from the "horse's mouth". 900G has a contract with AMF to design, market and distribute AMF bowling balls.

For me, it (bonding the money or the people)  and the writing of the rules are the only reasons to sanction a league, these days.

So you think the USBC would then reimburse the league?
(As if the treasurer or president had stolen the money?)

I agree that's probably the ONLY reason BUT truth be known if the league officers do NOT follow exact officer responsibilities bonding is ONLY paid back per league following USBC rules.  If they do NOT follow the USBC rules 100% then everything is pro rationed.

ie. If the league president does NOT check bank statement on a monthly basis then the league has NOT followed USBC rules and it's ALL pro rated.

CharlesT you bring up a great point that I would really love to know the answer to. Since so many leagues seem to take advantage of in-house banking systems that most centers provide, is it really "bankruptcy' proof?

Most people are honest, but some bankruptcies can get ugly. If you got someone who thought the "system screwed them", who is to say they wouldn't list league banking as a creditor?

This also makes me wonder about leagues, like one of mine in an AMF center, that uses the house as the league's bank. That is, all the money for each night is turned over to the house and they put it into their account. At the end of the season, they give the league president and treasurer the money.

What happens to that money, if AMF goes bankrupt before the end of the season. I'm inclined to believe it becomes part of their assets and our league becomes just another creditor.

Quote from: milorafferty on November 16, 2012, 04:47:57 PM

I would think that would be a case for USBC to step in and resolve the situation. Security of the league money is the main selling point of a sectioned league, right?

For me, it (bonding the money or the people)  and the writing of the rules are the only reasons to sanction a league, these days.

So you think the USBC would then reimburse the league?
(As if the treasurer or president had stolen the money?)

I have always thought that was one of their main selling points. In this case, I really don't know what would happen. If all the AMF centers went down, does USBC even have the resources to replace those funds??

I think in the AMF case, they filed for Chapter 11. If I recall this is a restructuring of their debts. I would think that any funds for league banking would be safe, but who knows these days.

I was thinking more of the Mom and Pop type center. We had one go out of business right at the end of the season last year here locally. The family that was trying to make a go of it have always been bowlers so they waited until the season ended to shut the doors.

What is to stop someone who could care less about the people in there center from listing the league banking account as a creditor. If I recall in that case, the secured creditors get there claims met first as they usually have UCC filing or lein on financed equipment. The unsecured creditors then get the crumbs left over if there are any.

Interesting times these days

Mike,

This is a potentially very serious concern. As far as I know, no leagues have lawyers which can determine what may happen in this bad scenario. I intend to bring this situation to the attention of the league when I get back in a few weeks (out right now, injured).

I think you and anyone in a league, that uses an AMF house for its league banker, should do the same.

Larger 5 person leagues can have anywhere from $25k to $75 or more in that account by the end of the year. If several leagues bank with the house, that's a lot of money with which they can payoff creditors.

Quote from: Bigmike on November 19, 2012, 07:44:10 PM

CharlesT you bring up a great point that I would really love to know the answer to. Since so many leagues seem to take advantage of in-house banking systems that most centers provide, is it really "bankruptcy' proof?

Most people are honest, but some bankruptcies can get ugly. If you got someone who thought the "system screwed them", who is to say they wouldn't list league banking as a creditor?

Quote from: charlest on November 16, 2012, 04:44:48 PM

This also makes me wonder about leagues, like one of mine in an AMF center, that uses the house as the league's bank. That is, all the money for each night is turned over to the house and they put it into their account. At the end of the season, they give the league president and treasurer the money.

What happens to that money, if AMF goes bankrupt before the end of the season. I'm inclined to believe it becomes part of their assets and our league becomes just another creditor.

Seriously use a real bank over the centers, in situations like this why would you want to depend on the USBC to step in when all else fails and a center goes under when you can prevent it.

At this point I'm more concerned that Hostess gets their situation fixed over AMF. Those chocolate cupcakes are worth saving.

+1 Yes the tradition of great baked good must survive! Namely the Twinkie, Wonder Bread, Drake's apple fruit pies, Yodels...the list goes on. The Hostess company is as American as apple pie! pun intended.