NEW YORK Ascendia Brands Inc ASCB.PK, a health and beauty care products maker whose brands include Mr. Bubble bath foam, filed for Chapter 11 bankruptcy protection on Tuesday and said it would try to sell itself.
Ascendia joined a growing number of companies in the consumer products sector filing for protection from creditors as the U.S. economy weakens and costs rise.
The manufacturer and distributor said it has begun talks with prospective buyers, and expects to complete a sale by September 30. Holders of its 42 million common shares would likely receive nothing for their holdings, Ascendia said.
Based in Hamilton, New Jersey, Ascendia said it was strapped with rising raw material costs, lower-than-expected sales of its Calgon and Healing Garden brands and higher-than-expected returns from some customers. It also blamed "general economic conditions" for the filing.
The company also said that Chief Executive Steven Scheyer had resigned, and that it named Douglas Booth, a partner in Carl Marks Advisory Group LLC, chief restructuring officer.
Ascendia and five affiliates filed for protection with the U.S. bankruptcy court in Wilmington, Delaware. It said it had $194.8 million of assets and $279 million of liabilities as of July 5, and lost $21.1 million from March to June.
The company said it sells products through mass merchants such as Wal-Mart Stores Inc (WMT.N) and Target Corp (TGT.N), dollar-store chains such as Dollar General Corp, and specialty stores such as Ulta. The company employs 276 people.
Booth said in an affidavit that Ascendia had arranged for $9 million of financing from lenders led by Wells Fargo Foothill Inc to keep operating while in bankruptcy.
The company said Coty Inc was among its largest unsecured creditors, with a $25.4 million claim.
Ascendia said its roots date to 1920, when it was founded as Lander Co. Lander was acquired in 2003 by private equity firm Hermes Group, which two years later merged it with Cenuco Inc to create Ascendia, the company said.
(Reporting by Jonathan Stempel, editing by Richard Chang)