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SEC Filings

424B1
BLACK & DECKER CORP filed this Form 424B1 on 11/18/2011
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We are both an operating company and a holding company and may require cash from our subsidiaries to make payments on the notes.

The notes are solely our obligation, and no other entity will have any obligation, contingent or otherwise, to make payments in respect of the notes. While we have substantial operations of our own, we are also a holding company for several direct and indirect subsidiaries. Our subsidiaries other than Black & Decker will have no obligation to make payments in respect of the notes. Accordingly, we may depend, in part, on dividends and other distributions from our subsidiaries to generate the funds necessary to meet our obligations under the Indenture governing the notes, including payment of interest. As described above, as an equity holder of our subsidiaries, our ability to participate in any distribution of assets of any subsidiary is “structurally subordinate” to the claims of the creditors of that subsidiary. The Indenture governing the notes does not restrict the amount of unsecured debt that our subsidiaries may incur. If we are unable to obtain cash from our subsidiaries, we may be unable to fund required payments in respect of the notes.

If the Black & Decker guarantee is deemed a fraudulent conveyance or preferential transfer, a court may subordinate or void it.

If, under relevant federal and state fraudulent transfer and conveyance statutes, in a bankruptcy or reorganization case or a lawsuit by or on behalf of unpaid creditors of our company, a court were to find that, at the time Black & Decker incurred a guarantee:

 

   

it did so with the intent of hindering, delaying or defrauding current or future creditors, or received less than reasonably equivalent value or fair consideration for incurring the guarantee; and

 

   

Black & Decker:

 

   

was insolvent or was rendered insolvent by reason of the incurrence of the indebtedness constituting the guarantee;

 

   

was engaged, or about to engage, in a business or transaction for which its assets constituted unreasonably small capital;

 

   

was a defendant in an action for money damages, or had a judgment for money damages docketed against it if, in either case, after final judgment the judgment is unsatisfied;

the court could void or subordinate the applicable guarantee to currently existing and future indebtedness of Black & Decker, and take other action detrimental to the holders of the notes including, under certain circumstances, invalidating the guarantee.

The measure of insolvency for purposes of the foregoing considerations will vary depending upon the law of the jurisdiction that is being applied in the relevant legal proceeding. Generally, however, Black & Decker would be considered insolvent if, at the time Black & Decker incurs the indebtedness constituting the guarantee either:

 

   

the sum of its debts, including contingent liabilities, is greater than its assets, at a fair valuation; or

 

   

the present fair saleable value of its assets is less than the amount required to pay the probable liability on its total existing debts and liabilities, including contingent liabilities, as they become absolute and matured.

We cannot give you any assurance as to what standards a court would use to determine whether Black & Decker was solvent at the relevant time or, regardless what standard was used, whether the applicable guarantee would not be avoided on another of the grounds described above.

While the guarantee provided by Black & Decker will be limited by its terms to the maximum amount that Black & Decker can pay without the guarantee being deemed a fraudulent conveyance, a court could find these limitations on the maximum amount of the guarantee to be ineffective or unenforceable and still apply federal and state fraudulent conveyance statutes to the guarantee to void the obligations under the guarantee or subordinate the guarantee to all other obligations of Black & Decker.

 

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