Compass Diversified Announces Extended Forbearance
Compass Diversified (NYSE: CODI) has secured a second forbearance agreement with its lenders, extending the forbearance period until October 24, 2025. The agreement includes an increase in the company's revolving credit facility availability from $40 million to $60 million during this period.
The forbearance follows an ongoing investigation into financial and accounting irregularities at CODI's subsidiary, Lugano Holdings. The investigation, which began in May 2025, has identified preliminary issues in Lugano's financing, accounting, and inventory practices. CODI emphasizes that the investigation is limited to Lugano and does not affect its eight other subsidiaries, which continue to operate normally and generate significant cash flow.
The company is working to complete the investigation and finalize necessary financial restatements while maintaining focus on maximizing stakeholder value.Compass Diversified (NYSE: CODI) ha ottenuto un secondo accordo di tolleranza con i suoi creditori, estendendo il periodo di tolleranza fino al 24 ottobre 2025. L'accordo prevede un aumento della disponibilità della linea di credito revolving della società da 40 milioni a 60 milioni di dollari durante questo periodo.
La tolleranza segue un'indagine in corso su irregolarità finanziarie e contabili nella controllata di CODI, Lugano Holdings. L'indagine, iniziata a maggio 2025, ha identificato problemi preliminari nelle pratiche di finanziamento, contabilità e inventario di Lugano. CODI sottolinea che l'indagine riguarda solo Lugano e non interessa le altre otto controllate, che continuano a operare normalmente e a generare flussi di cassa significativi.
L'azienda sta lavorando per completare l'indagine e finalizzare le necessarie rettifiche finanziarie, mantenendo al contempo l'attenzione sul massimo valore per gli stakeholder.
Compass Diversified (NYSE: CODI) ha asegurado un segundo acuerdo de indulgencia con sus prestamistas, extendiendo el período de indulgencia hasta el 24 de octubre de 2025. El acuerdo incluye un aumento en la disponibilidad de la línea de crédito revolvente de la compañía de 40 millones a 60 millones de dólares durante este periodo.
La indulgencia sigue a una investigación en curso sobre irregularidades financieras y contables en la subsidiaria de CODI, Lugano Holdings. La investigación, que comenzó en mayo de 2025, ha identificado problemas preliminares en las prácticas de financiamiento, contabilidad e inventario de Lugano. CODI enfatiza que la investigación se limita a Lugano y no afecta a sus otras ocho subsidiarias, que continúan operando normalmente y generando flujo de caja significativo.
La compañía está trabajando para completar la investigación y finalizar las necesarias rectificaciones financieras, mientras mantiene el enfoque en maximizar el valor para los interesados.
Compass Diversified (NYSE: CODI)는 대출기관과 두 번째 유예 계약을 체결하여 유예 기간을 2025년 10월 24일까지 연장했습니다. 이 계약에는 유예 기간 동안 회사의 회전 신용 한도가 4천만 달러에서 6천만 달러로 증가하는 내용이 포함되어 있습니다.
이번 유예는 CODI의 자회사인 Lugano Holdings의 재무 및 회계 부정행위에 대한 현재 진행 중인 조사에 따른 것입니다. 2025년 5월에 시작된 이 조사는 Lugano의 자금 조달, 회계 및 재고 관행에서 예비 문제를 확인했습니다. CODI는 이 조사가 Lugano에만 국한되며, 다른 8개 자회사에는 영향을 미치지 않으며 이들 자회사는 정상적으로 운영되고 상당한 현금 흐름을 창출하고 있다고 강조합니다.
회사는 조사를 완료하고 필요한 재무 재작성 작업을 마무리하는 동시에 이해관계자 가치를 극대화하는 데 주력하고 있습니다.
Compass Diversified (NYSE : CODI) a obtenu un second accord de tolérance avec ses prêteurs, prolongeant la période de tolérance jusqu'au 24 octobre 2025. L'accord prévoit une augmentation de la disponibilité de la facilité de crédit renouvelable de la société, passant de 40 millions à 60 millions de dollars pendant cette période.
Cette tolérance fait suite à une enquête en cours sur des irrégularités financières et comptables au sein de la filiale de CODI, Lugano Holdings. L'enquête, débutée en mai 2025, a identifié des problèmes préliminaires dans les pratiques de financement, de comptabilité et de gestion des stocks de Lugano. CODI souligne que l'enquête se limite à Lugano et n'affecte pas ses huit autres filiales, qui continuent d'opérer normalement et de générer des flux de trésorerie importants.
L'entreprise travaille à finaliser l'enquête et à effectuer les redressements financiers nécessaires tout en maintenant son objectif de maximiser la valeur pour les parties prenantes.
Compass Diversified (NYSE: CODI) hat mit seinen Kreditgebern eine zweite Nachsichtvereinbarung getroffen, die die Nachsichtfrist bis zum 24. Oktober 2025 verlängert. Die Vereinbarung beinhaltet eine Erhöhung der Verfügbarkeit der revolvierenden Kreditfazilität des Unternehmens von 40 Millionen auf 60 Millionen US-Dollar während dieses Zeitraums.
Die Nachsicht erfolgt im Anschluss an eine laufende Untersuchung von finanziellen und buchhalterischen Unregelmäßigkeiten bei CODIs Tochtergesellschaft Lugano Holdings. Die im Mai 2025 begonnene Untersuchung hat vorläufige Probleme in den Finanzierungs-, Buchhaltungs- und Lagerpraktiken von Lugano festgestellt. CODI betont, dass sich die Untersuchung auf Lugano beschränkt und die acht anderen Tochtergesellschaften, die weiterhin normal operieren und signifikante Cashflows generieren, nicht betrifft.
Das Unternehmen arbeitet daran, die Untersuchung abzuschließen und die notwendigen finanziellen Berichtigungen vorzunehmen, während es den Fokus auf die Maximierung des Stakeholder-Werts beibehält.
- Increased revolving credit facility availability from $40M to $60M
- Eight other subsidiaries continue normal operations with healthy balance sheets
- Lenders showing continued support through extended forbearance agreement
- Financial and accounting irregularities discovered at Lugano subsidiary
- Need for financial restatements due to investigation findings
- Potential material weaknesses in internal control over financial reporting
- Risk of commercial litigation related to the investigation
- Delayed financial reporting and possible delay in annual stockholder meeting
Insights
CODI extends forbearance until October while investigating accounting irregularities at Lugano subsidiary; other subsidiaries remain unaffected.
Compass Diversified has secured a second forbearance agreement with its lenders, extending the previous period until October 24, 2025. This arrangement comes amid an ongoing investigation into financial and accounting irregularities at Lugano Holdings, one of CODI's nine subsidiaries. The company's lenders have increased the availability on CODI's
The investigation, which began in May 2025, has preliminarily identified irregularities in Lugano's financing, accounting, and inventory practices. Critically, these issues appear to be isolated to Lugano, with CODI's eight other subsidiaries continuing to operate normally. Management reports these unaffected businesses maintain healthy balance sheets and collectively generate significant cash flow, which helps sustain CODI's overall liquidity position.
The forbearance agreement is particularly significant as it prevents lenders from exercising remedies they might otherwise pursue due to potential covenant violations resulting from the accounting irregularities. This breathing room allows CODI to complete its investigation and prepare necessary financial restatements without facing immediate credit restrictions. The expanded credit availability from
While the company hasn't disclosed the potential magnitude of the financial misstatements, the ongoing investigation creates uncertainty regarding CODI's historical financial reporting and could potentially lead to material restatements. The company faces several challenges including completing the investigation, finalizing financial restatements, addressing potential control deficiencies, and managing any commercial litigation that might arise from these issues.
WESTPORT, Conn., July 28, 2025 (GLOBE NEWSWIRE) -- Compass Diversified (NYSE: CODI) ("CODI" or the “Company”) announced today that on July 25, 2025, the Company and its lender group entered into a second forbearance agreement, extending the prior forbearance period until October 24, 2025. CODI’s lenders have further increased the amount of availability on the Company's
CODI originally entered into a forbearance agreement with its lenders on May 22, 2025 in the wake of CODI’s investigation into financial and accounting irregularities at its subsidiary, Lugano Holdings, Inc. ("Lugano"). The investigation has preliminarily identified irregularities in Lugano's financing, accounting, and inventory practices.
CODI is focused on completing the investigation, which is progressing in line with expectations, and actively working to finalize the necessary financial restatements. Importantly, the investigation is focused on Lugano and does not involve any of CODI's other subsidiaries.
“We remain focused on driving strong performance across CODI’s eight other subsidiary companies, all of which continue to operate normally, maintain healthy balance sheets, and collectively generate significant cash flow,” said Elias Sabo, CEO of CODI. “Our liquidity position remains solid, supported by increased access to capital through our revolving credit facility. We value the ongoing collaboration with our banking partners and bondholders as we work through this process. Our priority remains on maximizing value for all of our stakeholders.”
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including without limitation, CODI’s expectations as to the timing and outcome of the Lugano investigation, CODI’s credit availability and future liquidity, actions taken in response to the outcome of the investigation, the future performance of Lugano and CODI’s other subsidiaries, the filing or delay of CODI’s periodic reports, and the amount of any potential misstatements associated with Lugano and the impact any such misstatements may have on CODI’s previously issued financial statements or results of operations. Such forward looking statements may be identified by, among other things, the use of forward-looking terminology such as “believe,” “expect,” “may,” “could,” “would,” “plan,” “intend,” “estimate,” “predict,” “potential,” “continue,” “should” or “anticipate” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. These statements are based on beliefs and assumptions by the Board of Directors and management, and on information currently available to CODI’s Board of Directors and management. These statements involve risk and uncertainties that could cause CODI’s actual results and outcomes to differ, perhaps materially, including but not limited to: the discovery of additional information relevant to the investigation; the conclusions (and timing of those conclusions) concerning matters relating to the investigation; the timing of the review by, and the conclusions of, Grant Thornton regarding the investigation and CODI’s financial statements; a further material delay in CODI’s financial reporting or ability to hold an annual meeting of stockholders; the impacts of restatement reviews; the likelihood that the control deficiencies identified or that may be identified in the future will result in material weaknesses in CODI’s internal control over financial reporting; and commercial litigation relating to the investigation, including CODI’s representations regarding its financial statements, and the possibility of future litigation or investigation relating to CODI’s internal controls, restatement reviews, the investigation, or related matters. Please see CODI’s Annual Report on Form 10-K for the year ended December 31, 2024 for other risk factors that you should consider in connection with such forward-looking statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date such statements have been made. Except as required by law CODI does not undertake any public obligation to update any forward-looking statements to reflect events, circumstances, or new information after the date of this press release, or to reflect the occurrence of unanticipated events.
Investor Relations
Compass Diversified
irinquiry@compassdiversified.com
FAQ
What is the latest update on Compass Diversified's (CODI) forbearance agreement?
What financial irregularities were found at CODI's Lugano Holdings subsidiary?
How many of CODI's subsidiaries are affected by the financial investigation?
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