School Specialty files for Chapter 11 protection

GREENVILLE, Wis. (AP) -- Educational supplies company School Specialty is filing for Chapter 11 bankruptcy protection.

Its stock declined almost 55 percent in premarket trading Monday.

School Specialty said that it plans to sell its assets as a "going concern" to a Bayside Capital Inc. affiliate. If a company is a "going concern," it means that they have enough resources to continue operating indefinitely.

Bayside Capital is an affiliate of private investment firm H.I.G. Capital.

School Specialty said that it filed for bankruptcy protection in order to facilitate the sale. Its Canadian subsidiaries are includes in the proposed sale but are not part of the bankruptcy filing.

School Specialty said that the bankruptcy filing is not expected to impact its Canadian operations, which will run without interruption.

The bankruptcy filing was made in the U.S. Bankruptcy Court for the District of Delaware.

School Specialty also said that it received a commitment from its lenders for $50 million in additional financing. The Greenville, Wis., company said this financing will give it ample liquidity to run the business and meet its obligations to customers, business partners, suppliers and workers.

President and CEO Michael Lavelle said in a statement that School Specialty expects to continue operating normally and that it plans to meet all of its customer commitments and maintain customer policies and programs.

The sale process is expected to be completed in 60 to 90 days.

Shares of School Specialty Inc. fell 33 cents, or 54.8 percent, to 27 cents before the market open.