Spencer Winters of Kirkland & Ellis, counsel for the debtors, opened the hearing this morning with the news of the settlement, and indicated that the term sheet would be attached to a revised bidding procedures order, anticipated to be filed later today. The settlement resolves the ad hoc group’s motion to dismiss the Chapter 11 case, a motion Tupperware spent two days last week opposing.

The settlement provides that the ad hoc group will form an acquisition vehicle through which the group will purchase the Tupperware brand name and certain core aspects of the going concern business. The sale will be a private section 363 sale, with consideration for the purchase being comprised of a $63.8m credit bid and a $23.5m cash payment. In addition, the lenders will assume approximately $22.3m of revolving obligations and also make certain cure payments. The cash consideration of the purchase price will be used to repay the prepetition bridge loan, pay certain administrative costs of the estates and fund a settlement with the UCC.

Tupperware will also exit Chapter 11 via a liquidating plan that will establish a trust to be tasked with disposing of assets not included in the sale. The first $1m in proceeds from liquidating those assets will go to pay general unsecured claims, and any proceeds after that amount will be split — 90% to lenders and 10% to general unsecured claim holders.

In addition, the company will file a proposed bidding procedures order with a detailed settlement term sheet attached. The order will also reflect that the bid deadline has expired, that the auction is cancelled and that the debtors will file a notice of successful bidder indicating that the prepetition lenders’ acquisition vehicle is the winning bidder.

The objection deadline to the sale is set for 28 October, and the sale hearing will proceed on 29 October at 1:30pm ET.

Noting that while this sale process is atypical, Judge Brendan Shannon of the US bankruptcy court for the District of Delaware, stated that he was gratified that the stakeholders had been able to reach a consensual resolution and that he believes that the parties have found the best path forward to preserve and maintain value in Tupperware’s bankruptcy case.

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