The bankruptcy filing of one of America’s leading companies in artificial turf resulted from a patent lawsuit and saved the company from an overwhelming judgment. AstroTurf L.L.C. would have been, essentially, put out of business after a court case ended in 2015 with a jury awarding its competitor $20.3 million in a patent dispute. The competitor, Field Turf U.S.A., alleged the iconic company illicitly violated a patent on a manufacturing system related to securing artificial blades to the product’s backing.
AstroTurf alleged Field Turf used the lawsuit and the negative publicity from it to steer potential clients away from them. They said the ongoing 2010 patent litigation and the following publicity hurt the company. One of the arguments for private sale under bankruptcy is to keep the AstroTurf name, which would allow for a larger sale price.
The History of AstroTurf
AstroTurf, best known for laying artificial grass on professional sports fields like the Houston Astrodome, could not afford the bond to cover the judgment, according to company spokesmen. The result would have been a public sale. That would have been disastrous for Textile Management Associates, a marketing company of Dalton, Ga., which owns the AstroTurf brand and all intellectual property.
The artificial turf company filed Chapter 11 in federal court in Rome, Ga., hoping to sell the company to SportGroup Holding of Germany. Equistone Partners Europe Limited owns SportGroup, which produces more than $451 in revenue. Textile Management also wanted the sale to happen and filed opposition briefs against the company selling to anyone but SportGroup.
The bankruptcy filing and sale allows the best price for the company, which is best for stakeholders, according to AstroTurf officials. Field Turf opposed the deal and was pushing for a public sale. Even with opposition from Field Turf, a Georgia bankruptcy judge ruled earlier this month to move ahead with the private sale by allowing AstroTurf competitor APT Advanced Polymer Technology Group of Pennsylvania to buy the company’s marketing operations in Dalton for $16.1 million.
AstroTurf officials state the agreement with APT over the Georgia company is only one part of a deal to sell the entire company to SportGroup. The larger sale, amounting to approximately $92.5 million, results in SportGroup buying both AstroTurf and SYNLawn. The deal with SportGroup clears the way for Advanced Polymer to control three businesses affiliated with AstroTurf. Company officials said that is crucial because those companies never filed for bankruptcy protection. The businesses include athletic turf manufacturer Synthetic Turf Resources and the company’s research and development division.
For AstroTurf and SYNLawn, the sale will protect jobs and the industry in America. All products will continue to be manufactured in the United States and there will be no layoffs, according to a news release on the sale.
The deal is also good for the German company because it provides an avenue to North American customers, according to a press release.
The collaboration will lead to more sophisticated artificial grass products and advancement in the synthetic lawn industry, according to chief operating officer Heard Smith.