Tupperware food storage products are displayed on a shelf for sale at a store on September 18, 2024 in San Rafael, California. (Photo by Justin Sullivan/Getty Images) US Bankruptcy Judge Brendan Linehan Shannon granted a so-called “bridge order” at a Wednesday hearing in Delaware, allowing the company to temporarily use cash under a budget until 11 October, when a final hearing will be held over disputes.
The struggle of getting approval to use cash stemmed from the objection of a group of lenders, who are secured by substantially all of Tupperware’s assets, including the cash. The lenders, including Bank of America Corp. and hedge funds affiliated with Alden Global Capital, have argued that the Chapter 11 proceeding benefits no creditors and risks cash depletion, according to court papers.
The objection over the company’s use of cash threatened the pay of 465,000 door-to-door contractors after Tupperware’s first-day in bankruptcy court.
The lenders and the company are working on a “broader settlement,” according to a company attorney speaking at the Wednesday hearing. There are still significant issues to be solved, but the parties had several “constructive meetings” after the previous hearing, he said.
Tupperware filed for bankruptcy in mid-September after years of sales declines, operational stress, and recent failures in finding a buyer. The company has about $7.4-million in cash on hand as of the petition date, according to court papers. Lenders, on the other hand, preferred a simple foreclosure.
Judge Shannon also agreed to set up a status conference on 7 October, where the parties could share the updates of the case.