Briggs & Stratton Corp.’s bankruptcy might be bad news for bondholders owed $195 million and even worse news for hundreds of retirees who are losing health benefits as the COVID-19 pandemic takes a deadly toll on the nation’s elderly, The Wall Street Journal reported. On Sunday, the day before it filed for chapter 11 protection, Briggs & Stratton’s board voted to terminate health benefits for 450 former workers and end life-insurance protection for 4,000 former workers, effective as of the end of August. “We understand this is unfortunate news for our retirees, but we are grateful for their years of service and dedication to the company,” Briggs & Stratton spokesman Rick Carpenter said. At a hearing Tuesday before the U.S. Bankruptcy Court in St. Louis, <b>Ronit Berkovich</b> of Weil, Gotshal & Manges LLP said that if the company completes a planned bankruptcy sale to private-equity firm KPS Capital Partners LP, the business will be saved but little or nothing will be left for bondholders and other unsecured creditors. An auction planned for September could drive up the price, and KPS has agreed to pay some vendors as part of its buyout offer. But Briggs & Stratton’s financial plight — short of cash and with debt coming due this year — means the company can make no promises to low-ranking creditors. Bondholders are joining forces to try to steer Briggs & Stratton’s bankruptcy in a different direction, possibly toward a business reorganization that would improve their prospects of recovery. As for the retirees, they weren’t heard from at Briggs & Stratton’s courtroom debut. The company is seeking a court order saying that it was justified in terminating the benefits, despite Bankruptcy Code provisions that limit the rights of troubled companies to strip retirees of benefits.
