Rayovac 2010 Annual Report Download - page 111

SPECTRUM BRANDS HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
(A) As discussed below in the four column consolidated statement of financial position as of August 30, 2009
“Effects of Plan Adjustments,” note (f), the $15,580 relates to rejected lease obligations that are to be paid
by the Successor Company in subsequent periods.
Reorganization Items
In accordance with ASC 852, reorganization items are presented separately in the accompanying
Consolidated Statements of Operations and represent expenses, income, gains and losses that the Company has
identified as directly relating to the Bankruptcy Cases. Reorganization items expense (income), net during Fiscal
2010 and during the period from August 31, 2009 through September 30, 2009 and the period from October 1,
2008 through August 30, 2009 are summarized as follows:
Successor Company Predecessor Company
Year Ended
September 30,
2010
Period from
August 31,
2009 through
September 30,
2009
Period from
October 1,
2008 through
August 30,
2009
Legal and professional fees .............. $3,536 $3,962 $ 74,624
Deferred financing costs ................. — — 10,668
Provision for rejected leases .............. 110 — 6,020
Administrative related reorganization
items .............................. $3,646 $3,962 $ 91,312
Gain on cancellation of debt .............. — — (146,555)
Fresh-start reporting adjustments .......... — — (1,087,566)
Reorganization items expense (income),
net ................................ $3,646 $3,962 $(1,142,809)
Fresh-Start Reporting
The Company, in accordance with ASC 852, adopted fresh-start reporting as of the close of business on
August 30, 2009 since the reorganization value of the assets of the Predecessor Company immediately before the
date of confirmation of the Plan was less than the total of all post-petition liabilities and allowed claims, and the
holders of the Predecessor Company’s voting shares immediately before confirmation of the Plan received less
than 50 percent of the voting shares of the emerging entity. The four-column consolidated statement of financial
position as of August 30, 2009, included herein, applies effects of the Plan and fresh-start reporting to the
carrying values and classifications of assets or liabilities that were necessary.
The Company analyzed the transactions that occurred during the two-day period from August 29, 2009, the
day after the Effective Date, and August 30, 2009, the fresh-start reporting date, and concluded that such
transactions were not material individually or in the aggregate as such transactions represented less than
one-percent of the total net sales for the fiscal year ended September 30, 2009. As a result, the Company
determined that August 30, 2009, would be an appropriate fresh-start reporting date to coincide with the
Company’s normal financial period close for the month of August 2009. Upon adoption of fresh-start reporting,
the recorded amounts of assets and liabilities were adjusted to reflect their estimated fair values. Accordingly, the
reported historical financial statements of the Predecessor Company prior to the adoption of fresh-start reporting
for periods ended on or prior to August 30, 2009 are not comparable to those of the Successor Company.
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