Instant Pot And Pyrex's Parent Company Just Filed For Bankruptcy

Instant Brands, the parent company of brands such as Pyrex, CorningWare, and Instant Pot, filed for Chapter 11 bankruptcy on June 12. The company, which claims that at least one product from any of its brands can be found in roughly 90% of U.S. households, released a statement saying the filing is a move to take "steps to strengthen the company as it continues providing housewares and appliance products under its iconic brands." Despite the filing, the company's President and CEO, Ben Gadbois, claims to be operating in positive cash flow territory.

Instant Brands filed a number of motions with the court to continue business operations, such as paying employees without disruption. Though it's very likely to be granted, without the approval of this motion, Instant Brands would be obligated to pay its creditors before its employees, potentially leaving no cash flow for employee paychecks. Lack of court approval could also cause a disruption in operations, leaving retailers without product.

For those who don't speak financial legalese, a Chapter 11 bankruptcy is known as a "reorganization" bankruptcy. It allows a company to stay in business as it restructures obligations — affairs, debts, and assets — to stakeholders and creditors, as a kind of fresh start. During a Chapter 11 restructuring, Instant Brands will need court approval to make certain decisions such as selling non-inventory business assets (the court won't need to approve your new Pyrex brownie dish purchase) and stopping or expanding business operations. 

So how did this happen with a company whose brands are so popular, even iconic? President and CEO Ben Gadbois says that while the company successfully navigated the pandemic and resulting global supply chain crisis, it continues to "face additional global macroeconomic and geopolitical challenges that have affected our business." He cited the "tightening of credit terms" and increasing interest rates, which made its "capital structure unsustainable."

According to Bloomberg, the company also faced both waning lines of credit and dwindling cash on hand — a bad position to be in as a business. Early in 2023, the Wall Street Journal reported that Instant Brands had hired advisors to help them restructure, the first sign that they were facing trouble with their position. 

Though not all companies make it through a Chapter 11 filing alive — Enron and Lehman Brothers, for example — some bounce back with record profits. Companies that have filed for Chapter 11 — and gone on to thrive — include General Motors, Marvel Entertainment, and Sbarro. According to the press release, as a result of the filing, Instant Brands has received a commitment of $132.5 million in new "debtor-in-possession" financing, awaiting approval from the Court.