A Leslie's Pool Supplies store in a strip mall in Green Brook, New Jersey, seen across a nearly empty parking lot on a grey winter day in January 2022 · Curlyrnd, via Wikimedia Commons · CC BY-SA 4.0

Article · 2026-10-01 · 6 min read · Pool and spa supplies retail · Stocks

Leslie's files for bankruptcy with a plan that cancels its shares

The pool-supply retailer, 943 locations in July, entered Chapter 11 on 30 September under an agreement with lenders holding 81.1 percent of its $756.65 million term loan: they put in $150 million and are assigned every slice of the new company's stock the filing lists, about 90 percent of the funded debt is erased, 76 stores closed the day before, and the filing says the existing stock 'will be cancelled for no consideration'; Nasdaq suspends trading on 6 October.

By the desk. Researched and written by an AI model from the sources listed at the end; nothing here restates another publication's text.

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What Leslie's filed

On Wednesday 30 September Leslie's, Inc., the Phoenix company that sells pool and spa supplies, and nine of its subsidiaries filed for Chapter 11 in the United States Bankruptcy Court for the Southern District of Texas, 'to implement a pre-arranged chapter 11 plan of reorganization'. Chapter 11 lets a company keep operating while a court supervises a plan to pay or cut its debts. The company's current report reached EDGAR the same day. ^{[1, 2]}

The plan was agreed before the filing. Lenders holding approximately 81.1 percent of the company's term loan signed a restructuring support agreement, a contract to back the plan. The report counts the debts that the bankruptcy puts in default: approximately $756.65 million borrowed under the term loan and approximately $50 million under a credit line secured by its assets. The company's release says the plan brings 'a reduction of approximately $685 million or 90%' of its funded debt. ^{[1, 2]}

Stores closed first. On Sunday 27 September the company approved what the report calls a strategic plan, and on Tuesday 29 September it 'closed approximately 76 U.S. stores identified as under- or non-performing', to be vacated within two weeks; it says it cannot yet estimate the charges. Arizona's Family, a Phoenix broadcaster, reported that the locations of those stores were not immediately known. The release says the other stores remain open, that wages and vendors are to be paid as usual once the court approves, and that 'All gift cards and loyalty program benefits will continue to be honored.' ^{[1, 2, 5]}

What shareholders get

Nothing, under the plan as filed. The report says 'all existing equity interests in the Company will be cancelled and no consideration shall be paid to the holders thereof', and names the common stock quoted on Nasdaq under the symbol LESL among them. The company adds a caution of its own: 'trading in the Company's securities during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks'. The plan still needs the court's approval. ^[1]

The exchange is acting as well. Nasdaq notified the company on 25 September that its stock had spent 30 business days in a row under the exchange's minimum bid requirement and that no grace period applies, because the company carried out a reverse stock split within the past year. Trading is to be suspended at the open on 6 October; the company says it does not intend to appeal and expects the stock to be quoted afterward on an over-the-counter market. A reverse split swaps many old shares for one new one: Leslie's carried out a 1-for-20 split in September 2025, by its quarterly report. ^{[1, 3]}

Who owns it afterward

The lenders. The report lists four slices of the reorganized company's stock: 55.80 percent to the lenders who buy $60.0 million of it in a private placement; 30 percent in exchange for part of the loan made during the bankruptcy; 10 percent to the holders of the old term loan; and 4.20 percent as a premium to the lenders who guarantee the placement. By the desk's arithmetic that is 100 percent, before shares set aside for a management incentive plan. The release describes the outcome as 'majority ownership of a group of its existing lenders'. ^{[1, 2]}

The money that keeps the stores open is debtor-in-possession financing, credit extended to a company in bankruptcy that ranks ahead of its older debts. Leslie's has asked the court to approve two facilities: a $90.0 million term loan from its term lenders, half on an interim order and half on a final one, and a $225.0 million line from its existing asset-based lenders that takes in what is owed under the old line. On the day the plan takes effect, $75 million of the first becomes a new term loan. Creditors with no collateral share what the report calls 'a cash pool', whose size it does not state. ^[1]

How it got here

The warning was already on file. The quarterly report of 12 August said conditions 'raise substantial doubt about the Company's ability to continue as a going concern', the accounting phrase for doubt that a company can meet its obligations over the next year, and that the company expected to 'refinance, restructure, extend or if necessary, seek relief under applicable reorganization laws' before the term loan came due on 9 March 2028. It counted 943 locations in 38 states on 4 July, $45.9 million of cash and a stockholders' deficit of $492.7 million, which means liabilities exceeded assets by that much. It also recorded that Standard and Poor's had lowered the company's credit rating to CCC from CCC+. ^[3]

Sales were shrinking. For the three months to 4 July they were $458.5 million against $500.3 million a year earlier, 8.4 percent lower, on what the report called 'a slower summer pool season' and the loss of closed stores; the net loss for nine months was $87.7 million. Material the company prepared for its lenders and published on Wednesday puts sales for the fiscal year through 31 August at $1,017.0 million against $1,109.0 million, and the count of customers at 2.79 million against 2.89 million. The same pages say 'Up to 200 planned store closures contemplated in ch. 11'. An earlier round, of 80 stores and a distribution center, was decided in November 2025. The company says the material 'was not prepared with a view toward public disclosure'. ^{[3, 4, 1]}

What settles it next

The agreement sets deadlines counted from the filing: a first order on the bankruptcy loans within 3 days and a final one within 35; a plan and a disclosure statement within 20 days; the court's confirmation within 100; the plan in effect within 110. By the desk's count of the calendar those last three fall on 20 October, 8 January and 18 January. The lenders may end the agreement if a deadline is missed. Nasdaq's suspension is set for 6 October, and 2 October is the last day to ask for a hearing, which the company says it will not do. The release gives the goal as 'emerging from chapter 11 in early 2027'. The trade magazine PoolPro reported the same terms from the release. ^{[1, 2, 6]}

Who it reaches

Leslie's directly: its shareholders, whose stock the plan cancels; its lenders, who become its owners; its employees and the customers of the stores that closed. Bank of America, whose bank is administrative agent and collateral agent of the asset-based credit agreement. Jefferies, a unit of which the report says may front the new term loan at first. The report names Alter Domus as agent for the term lenders and does not name the lenders themselves. ^[1]

Sources

Every stock is a company; the desk grades the company behind the stock. This article describes; it does not recommend. Adjacent means the company is not named in the event and the path by which it is reached is stated above.

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