Hoonigan: Prepack Cuts $1.2B Debt and Sells 4 Wheel Parts
Hoonigan used a prepackaged Delaware chapter 11 case to cut about $1.2 billion of debt, shift ownership to first-lien lenders, sell 4 Wheel Parts and Poison Spyder, and close the cases in February 2025.
In this article
Wheel Pros, LLC, doing business as Hoonigan, filed a prepackaged chapter 11 case in Delaware on September 8, 2024. Trade coverage immediately framed the filing as the bankruptcy of one of the largest automotive aftermarket platforms in the country, with publications pointing to the company's brand portfolio, wholesale scale, and debt burden in filing coverage, trade coverage, auto coverage, industry coverage, and financial-press coverage.
The company's own filing announcement said the restructuring support agreement would eliminate about $1.2 billion of debt and support about $570 million of new capital. Outside analysis described the case as the collapse of a leveraged aftermarket roll-up in a tougher demand and rate environment through industry analysis and an S&P ratings update. The court confirmed the plan on October 15, 2024, the debtors announced court approval the same day, the plan became effective on December 2, 2024, and the reorganized company later said it had completed the restructuring. A transaction summary published after emergence said the new capital structure included a $500 million exit term loan and a $175 million exit ABL facility.
| Debtor(s) | Wheel Pros, LLC and 26 affiliates |
| Court | U.S. Bankruptcy Court, District of Delaware |
| Case Number | 24-11939 (JTD) |
| Judge | Hon. John T. Dorsey |
| Petition Date | September 8, 2024 |
| Case Type | Prepackaged chapter 11 |
| DIP Facility | $175 million DIP ABL plus $110 million DIP term loan |
| Confirmation Date | October 15, 2024 |
| Effective Date | December 2, 2024 |
| Final Decree | February 11, 2025 |
| Claims Agent | Stretto, Inc. |
How Wheel Pros Became Hoonigan
The court record shows that this was not a single-brand bankruptcy. The First Day Declaration describes Wheel Pros as a global automotive aftermarket platform spanning wheels, tires, accessories, lighting, suspension, media, e-commerce, and the 4 Wheel Parts retail business. The debtors told the court they served more than 30,000 retailers through 42 distribution centers, employed more than 1,750 people, and generated about $1.5 billion of revenue in 2022 before revenue fell to about $1.34 billion in 2023.
That scale came from a multi-year acquisition strategy. The declaration traces Clearlake's 2018 acquisition of Wheel Pros and the later additions of brands and businesses including Hoonigan, Throtl, TeraFlex, and 4 Wheel Parts. The filing therefore reached beyond a single sponsor-backed borrower. It covered a large distribution network, a major wheels platform, enthusiast-media brands, and a retail chain that still had 42 stores when the case began. Outside aftermarket commentary treated the case as a consequential reset for the sector rather than an isolated filing.
Why Wheel Pros Filed
The first-day declaration attributes the filing to a familiar mix of post-pandemic problems: discretionary-demand normalization, inflation, rising interest rates, supply-chain disruption, tariff pressure, and acquisition-integration strain. Management said aluminum costs almost doubled between 2020 and 2022, ocean freight costs nearly quintupled over the same period, and a 25% tariff on China-sourced wheels pushed product costs higher just as growth slowed.
The same declaration says EBITDA fell sharply after the pandemic surge. The debtors reported that adjusted EBITDA dropped by $152 million from 2021 to 2022 and then declined by another $23 million in 2023. Against that backdrop, roughly $1.746 billion of funded debt had become unsustainable. The S&P ratings update described the same deterioration in operating performance and liquidity, while outside analysis tied the filing to the capital structure left by the company's roll-up strategy.
The Prepack Handed Equity to the First-Lien Lenders
The chapter 11 case was designed to move quickly because the restructuring had already been negotiated. The Amended Plan and the Confirmation Order show the basic economic split. ABL claims and FILO claims were unimpaired and paid in full. First-lien claims were impaired and received 85% of the new equity, subject to dilution, plus the right to fund their pro rata share of the exit term loan facility. Consenting backstop first-lien lenders received the remaining 15% of the new equity, also subject to dilution by the management incentive plan.
Junior funded debt claims did not receive an equity stake. The CEO Confirmation Declaration says those claims were allocated their pro rata share of $750,000 in cash, subject to the legacy notes settlement. The A&M Confirmation Declaration quantified the projected recoveries: 100% for ABL claims, 100% for FILO claims, 53% for first-lien claims, 0.1% for junior funded debt claims, and 100% for general unsecured claims.
| Class | Projected Recovery | Plan Treatment |
|---|---|---|
| ABL claims | 100% | Paid in full |
| FILO claims | 100% | Paid in full |
| First-lien claims | 53% | 85% new equity plus exit term loan rights |
| Junior funded debt claims | 0.1% | Pro rata share of $750,000 cash |
| General unsecured claims | 100% | Paid in full or reinstated |
The same structure was reflected in external summaries after emergence. Hoonigan's confirmation release described a court-approved balance-sheet reset, and Davis Polk's emergence summary tied that reset to the exit term loan and exit ABL facilities.
The Case Also Included Two Asset Sales
Although the case was prepackaged, it still included a meaningful divestiture track. The DIP Motion and Final DIP Order authorized a $175 million DIP ABL facility and a $110 million DIP term loan to fund operations and the restructuring process. That financing gave the debtors enough runway to confirm the plan and complete targeted sales while preserving operations.
The larger sale was 4 Wheel Parts. The 4WP Sale Motion sought approval for a private sale of the 4 Wheel Parts retail business to ORW USA, Inc., an affiliate of ARB Corporation Limited, for $30 million in cash plus assumed liabilities, subject to adjustments. The court approved the transaction in the 4WP Sale Order. Outside sale coverage and automotive coverage both emphasized that the deal would move 4 Wheel Parts back into the orbit of the Adler family and ARB-linked buyers.
The debtors also sold the Poison Spyder assets. The Poison Spyder Sale Motion proposed a $1 million cash sale to Air Locker, Inc., an ARB subsidiary, and the court approved that transaction in the Poison Spyder Sale Order. The two sales helped simplify the platform while the plan transferred control of the reorganized business to the first-lien lender group.
Confirmation Took Five Weeks; Closure Took Until February
The case moved quickly by chapter 11 standards. The confirmation order was entered on October 15, 2024, a little over five weeks after the petition date, and the effective date notice says the plan became effective on December 2, 2024 after the conditions precedent were satisfied or waived. Around that time, both the company's emergence release and an emergence note said Hoonigan had completed the restructuring and emerged from chapter 11.
Case closing took a little longer. The Final Decree Motion filed on January 24, 2025 said the plan had been substantially consummated, allowed claims had been addressed or provided for in the ordinary course, and the reorganized debtors were ready to terminate Stretto's claims-and-noticing services and complete the final administrative handoff to the clerk. The court entered the Final Decree on February 11, 2025, and Stretto filed the final claims register the same day.
Why the Case Mattered in the Aftermarket
Wheel Pros had become large enough that its bankruptcy was also an industry event. The debtors said the company had a 40% to 45% share of the U.S. wheels aftermarket in 2023 and maintained relationships with more than 30,000 retailers. That made the chapter 11 case a test of whether a large, acquisition-built aftermarket platform could reset its balance sheet without disrupting the broader distribution chain.
The company emerged, but only after equity was wiped out, first-lien lenders took control, and the company sold noncore pieces. Trade coverage, industry commentary, and the company's own emergence release point to the same outcome: the wholesale and brand platform survived, but the surviving company emerged with a lender-owned capital structure and a narrower asset base.
Timeline
The key milestones below match the company's court-approval release, its emergence release, and the final docket chronology.
- September 8, 2024: Wheel Pros / Hoonigan files its prepackaged chapter 11 case.
- September 9, 2024: The debtors file the DIP financing motion.
- September 16, 2024: The debtors file the 4 Wheel Parts and Poison Spyder sale motions.
- October 7, 2024: The court approves the Poison Spyder sale.
- October 15, 2024: The court confirms the plan, enters the final DIP order, and approves the 4 Wheel Parts sale.
- December 2, 2024: The plan becomes effective and the reorganized company announces emergence.
- January 24, 2025: The reorganized debtors move for a final decree.
- February 11, 2025: The court enters the final decree and closes the cases.
Frequently Asked Questions
What did Hoonigan own when it filed?
The debtors said the platform included major wheels, tires, lighting, suspension, media, e-commerce, and retail assets, including 4 Wheel Parts. Trade outlets covering the case treated it as the bankruptcy of a large aftermarket platform rather than a niche performance brand, as reflected in filing coverage and industry coverage.
Was this a freefall filing?
No. It was a prepackaged case. The debtors filed with a restructuring support agreement in place and confirmed the plan a little over five weeks after the petition date.
How much debt did the restructuring eliminate?
The company said the restructuring would eliminate about $1.2 billion of debt and later repeated that figure in its emergence release.
What happened to 4 Wheel Parts?
The debtors sold 4 Wheel Parts to ORW USA, an affiliate of ARB Corporation Limited, for $30 million cash plus assumed liabilities under the sale motion and sale order. Outside sale coverage and automotive coverage highlighted that 4 Wheel Parts was leaving the chapter 11 estates during the restructuring.
Who ended up owning the reorganized company?
The plan gave first-lien lenders 85% of the new equity, subject to dilution, while backstopping consenting first-lien lenders received the remaining 15%, also subject to dilution.
When did the case end?
The plan became effective on December 2, 2024, and the court closed the cases on February 11, 2025.
For more chapter 11 coverage, see the ElevenFlo blog.
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. Read our full disclaimer.