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December 16 • 04:14
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Prince Sports seeks bankruptcy court OK of licensing agreement

June 02, 2012
Bankrupt tennis racquet maker Prince Sports Inc. is seeking court permission to enter into a licensing agreement with Battle Sport Science that would hasten the company's transformation from sports equipment manufacturer into an intellectual property licensing vehicle.

In a motion filed with the court in Wilmington, Del., on May 18, Prince said that it has entered into an agreement with Battle, which is already a licensee affiliate of Authentic Brands Group – the company that will acquire Prince's equity under its reorganization plan – that must be approved by the court if Prince is to continue servicing its customers through the upcoming 2012 season.

A hearing on the matter originally scheduled for May 24 was rescheduled this week to May 31.

Under the agreement, Prince will earn a royalty of 15% on net sales and an additional royalty of 10% of retail on any goods sold through an e-commerce website run by Battle. Battle has agreed to pay Prince a guaranteed minimum of more than $3 million annually for contract years 2013 through 2017.

Licensed products include racquets, balls, strings, tennis-specific on-court footwear, training towels, and beach towels.

"Upon completion of their restructuring, the debtors currently expect to have re-focused their business model in the United States from the sourcing, distribution, and sale of products bearing and utilizing the debtors' intellectual property assets (including the marks) to a model focused on revenue based on the license of those assets to other parties for those purposes, thereby transferring or eliminating a substantial portion of the cost structure associated with the debtors' current business," Prince said.

As LCD has reported, Prince filed for Chapter 11 protection on May 1, with a proposed plan that would hand the company's equity to licensing company Authentic Brands Group.

A hearing on the company's disclosure statement has been scheduled for June 18. A confirmation hearing is currently set for July 27. – John Bringardner

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