Hoonigan's finances have hit the skids but the company is determined to stay in operation.
The automotive entertainment and aftermarket parts business famous for its Gymkhana videos starring Ken Block announced on Monday that it has filed for Chapter 11 bankruptcy protection with a court in Delaware.
Hoonigan said it has entered into a restructuring agreement with a majority of its creditors, via which it expects to eliminate approximately $1.2 billion from its current debts which total $1.75 billion. The company also plans to secure up to $570 million in new capital.
The company said it expects its operations to continue as normal during the process, and that all unsecured creditors should be paid in full.
Hoonigan is owned by private equity firm Clearlake Capital and racked up most of its debts in the years following the pandemic with a series of acquisitions aimed at rapidly expanding the business.
It started when aftermarket wheels giant Wheel Pros acquired the original Hoonigan in 2021, along with a few other companies (including throtl and Transamerican Auto Parts), with the combined entity being rebranded Hoonigan in late 2023. While revenues initially spiked, issues like supply chain constraints and rising interest rates saw them start to fall in 2023 and the company began missing projected earnings targets. In 2024, the company started missing interest payments on some of its debts.
The company's fate now rests in the court handling its restructuring agreement.
