A New York City-based equity firm will buy the company.
A month after skipping a $6.7 million interest payment and giving $2.6 million in “retention awards” to top executives instead, small engine manufacturer Briggs & Stratton has filed for bankruptcy protection, the company announced Monday. The filing was first reported by the Milwaukee Journal Sentinel.
The company, a longtime Milwaukee-area staple currently headquartered in Wauwatosa, announced the bankruptcy at the same time as a sale to KPS Capital Partners, a New York City-based private equity firm, for $550 million. Briggs previously announced it also was sending 200 jobs out of Wauwatosa to Sherill, New York, at the end of August.
Briggs, hampered by the coronavirus crisis, is also under fire for allegedly unsafe working conditions at its Wauwatosa factory during the pandemic. KPS said in a press release that it is working with the United Steelworkers union, which represents hourly employees in Wauwatosa, to agree to new collective bargaining terms.
Three workers have told UpNorthNews that the coronavirus protections Briggs & Stratton have put into place — including providing some hand sanitizer, taping the floors to encourage social distancing, and installing some plastic barriers — are not adequate. Workers must still be on close-quarters assembly lines, and masks are not required, they say.
Employees who quarantine voluntarily or who test positive for COVID-19 are eligible for just $375 per week in short-term disability payments, and the company has provided no hazard pay or sick leave, according to the workers.
Briggs president and CEO Todd Teske, who received a $1.2 million retention award last month, said in a statement about the bankruptcy that the company has “a storied past and a bright future.” As the restructuring and selloff occurs, manufacturing will continue, he said.
The company was about $600 million in debt as of March 31, according to the Journal Sentinel. Cash awards such as those given to Briggs’ executives are commonplace before companies file for bankruptcy, the Journal Sentinel reports.
“The new Briggs & Stratton will be conservatively capitalized and not encumbered by its predecessor’s significant liabilities,” Michael Psaros, co-founder and co-managing partner of KPS, said in a statement.