HALO Voluntarily Pays Newton Creditors In Supplier Recovery Program
On July 11, HALO Branded Solutions voluntarily paid $454,344 to unsecured trade creditors of bankrupt industry distributor Newton Manufacturing Company. This is the Sterling, Illinois-based distributor’s first-year distribution under its Newton Supplier Recovery Program. As part of the program, Newton trade creditors were paid an amount equal to 10 percent of HALO’s revenue in excess of $12 million during the 12 months ended June 30, 2016, from account executives selling for Newton during any portion of 2014 or 2015. HALO purchased certain Newton business assets from its bankruptcy estate on June 30, 2015.
“When we purchased the Newton assets, we made a commitment to the trade suppliers and decorators that we would work with them and for them to recover as much as we could from the Newton business,” says Marc Simon, HALO CEO. “Recognizing that we had no legal obligation to do this and being fully aware that we had not created any such expectation, we voluntarily announced the program the day after the purchase had closed. The goal of the Newton Supplier Recovery Program was to align the interests of Newton suppliers and account executives with HALO’s goal of successfully nesting Newton account executives. The account executives we have added from Newton have been a great addition to the HALO team and their success with HALO is translating directly into recovered debt for our valued suppliers.”
In what is reportedly the first program of its kind in the promotional products industry, the program will pay more than 500 industry suppliers 14.9 cents on the dollar on Newton unsecured trade debt, with an additional possibility for further payment based on retained revenue on the second anniversary of the program on June 30, 2017.
Simon adds, “While 14.9 cents on the dollar might not seem like a lot to any one supplier or decorator, I hope the industry recognizes that $454,344, our first-year payment, represents a very significant investment in our relationships with all industry suppliers and decorators. We are actively and demonstratively investing in these important supplier relationships for the long-term, protecting our existing account executives and reinforcing to our suppliers that HALO is the best option they can recommend to many of their distributor customers, whether or not they may be experiencing financial challenges.”
HALO’s Newton Supplier Recovery Program payment is independent of the Newton Manufacturing Company’s Chapter 11 bankruptcy estate and any amounts that may be paid to unsecured creditors following Newton’s bankruptcy by its liquidating trustee.