After 30 years in business, Chicago-based WhirlyBall filed for Chapter 5 bankruptcy protection on Friday as it seeks to restructure its debt.
Chicago Whirly Inc., a subsidiary of Whirl Management Inc., has filed for bankruptcy in the U.S. Bankruptcy Court for the Northern District of Illinois.
Subchapter V is a Chapter 11 bankruptcy law that was enacted as part of the Small Business Reorganization Act of 2019. The subchapter is aimed at small businesses and temporarily increases the debt eligibility threshold from $2.7 million to $7.5 million, but the increased threshold expires on Friday. According to the Department of Justice, the subchapter also shortens the deadline for filing a reorganization plan, provides greater flexibility in negotiating a reorganization plan with creditors, and eliminates the need to pay quarterly fees to the U.S. Trustee.
Whirlyball CEO Alex Elias told the Sun-Times that the company’s main focus is on restructuring its debt and administering some of its lease guarantees. The filing covers only the store at 1825 W. Webster Ave. in Bucktown.
Elias said the company chose the Subchapter V route because it targets small, family-owned businesses like WhirlyBall.
Elias said the company remains “financially sound” and that bankruptcy protection will enable WhirlyBall to exit the process as quickly as possible. WhirlyBall does not anticipate any layoffs or job impacts at this time.
Filing for bankruptcy will allow the company to complete a restructuring process in just 90 days, a process that would take other companies years.
“This financial restructuring will position our company for long-term success, stability and growth,” WhirlyBall said in a statement. “We continue to welcome guests and host events at all five WhirlyBall locations and are operating as usual.”
Wheelieball combines several popular team sports with bumper cars: players ride “Wheelie Bugs” and use short, lacrosse-stick-like scoops to pick up balls and throw them at targets that, like basketball, are suspended 10 feet in the air to score.
Like many of its peers, Whirlyball was hit hard by the pandemic, and Elias said the company didn’t make any money in December 2020 due to shutdowns and restrictions on large gatherings.
“The holiday season, which is normally a very busy time, has been a very tough period,” he said.
Whirlyball closed its stores temporarily multiple times during the pandemic, but still had vendor obligations and payments due on the 40,000- to 50,000-square-foot facility it rents.
“That started to create some different issues,” Elias said.
Whirly Ball was founded in Chicago in 1993 by Elias’ father, Sam, and celebrated its 30th anniversary last year. It has stores in Chicago, Naperville and Vernon Hills, as well as Brookfield, Wisconsin and Colorado Springs, Colorado.
Each facility features a restaurant, bar and private event space, and some also offer bowling, laser tag and other games.
WhirlyBall will continue to host events at all five locations and offer event packages to customers.
“We are committed to our team members and guests first and foremost and look forward to further building on our tradition,” Elias said. “This is all focused on growing the company and will only serve to further improve the health of our organization.”
