When continuation fund assets go bankrupt
Wheel Pros, rebranded as Hoonigan, a company backed by Clearlake Capital, filed for Chapter 11 protection from creditors this week, according to bankruptcy documents. Clearlake acquired the company in 2018.
Beyond the natural interest in anything PE-related, this situation is extra interesting to us because Clearlake moved Wheel Pros into a continuation fund back in 2021. The deal was part of the firm’s “Icon” series of continuation fund deals, of which it has completed five.
We haven’t seen a lot of continuation fund assets fall into bankruptcy, so this situation stands out. Another CV bankruptcy occurred earlier this year with Riverstone-backed Enviva Holdings, which the firm had moved into a $1 billion-plus continuation fund way back in 2020.
I’m wondering if investors in a continuation fund...