Schutt Sports Inc. has sought bankruptcy protection a month after losing a patent infringement lawsuit brought by competitor Riddell Inc.
Schutt Sports, a baseball, softball and football helmet manufacturer based in Litchfield, Ill., filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court, District of Delaware, on Monday.
Schutt Sports is seeking a reorganization that could include the sale of part of the privately held company.
In the bankruptcy filing, Schutt Sports listed both its assets and liabilities as each ranging between $50 million to $100 million. Schutt has obtained $34 million in financing through Bank of America to provide funds to continue operations.
"The company is shoring up its capital structure to assure smooth business operations while they work toward a restructuring plan," said spokeswoman Jen Fleishman. "They are looking at all of their options right now."
Founded in 1918, Schutt makes helmets, shoulder pads and mouthguards for professional, college and amateur athletes. It has 500 employees in Litchfield and Salem, Ill., and a reconditioning facility in Easton, Pa.
Schutt filed for Chapter 11 after losing a $29 million patent infringement lawsuit brought by a competitor, Riddell, in federal court in December 2008. Each of the patents at issue in the suit were filed within the past decade.
Riddell claimed Schutt unlawfully misappropriated Riddell's head protection technology that is designed to reduce concussions.
On Aug. 10, a jury found that Schutt's DNA and ION football helmets infringed on patents held by the rival. It awarded Riddell $24 million for the patent infringements and $5 million for royalties.
Riddell, the official helmet of the National Football League, is based in suburban Chicago and is a division of Easton-Bell Sports, based in Van Nuys, Calif.
Riddell filed another patent infringement suit in August, claiming Schutt's shoulder pads also infringe on a patent held by Riddell.
"We are reviewing Schutt's filing in the bankruptcy court and continuing to evaluate those on the merits, and also, what, if any, impact they have on the pending litigation in Wisconsin," said Christopher Hanewicz, an attorney with law firm Perkins Coie LLP in Madison, Wis., who is representing Riddell.
Schutt plans to appeal the jury's $29 million verdict, Fleishman said, but in the meantime has filed bankruptcy and hired Oppenheimer & Co. Inc. as its investment banker to look for new investors as it pursues a reorganization of the company.
Schutt's president and CEO, Robert Erb, declined to be interviewed but said in a statement that the company will continue to operate without interruption.
"Schutt's management and board of directors determined that a Chapter 11 process would provide the best long-term solution for our customers, suppliers, and employees," Erb said in the statement. "This process will allow us to continue operating our business as usual and to continue servicing our customers without disruption."
