UPDATE: Producers seek to force 1800mattress.com into bankruptcy

Unclear how Chapter 7 petition will affect proposed sale

Larry Thomas -- Furniture Today, March 18, 2009

NEW YORK — Two mattress producers and a landlord have filed a petition in U.S. Bankruptcy Court here asking that 1800mattress.com be forced into Chapter 7 bankruptcy.

The petitioners, who include Sealy and Comfort Solutions licensee Blue Bell Mattress, contend the retailer is not paying its bills. By filing the petition, they are trying to force the company to liquidate its assets and distribute the proceeds to creditors.

According to documents filed with the court, Sealy says it is owed $1.16 million and Blue Bell says it is owed $471,409. The third petitioner, 6225 Jericho Turnpike LLC, says it is owed $17,452 in rent.

Earlier this week, the retailer said it had signed a letter of intent to sell the company to an investor group led by mattress industry veteran Ken Mazda.

It was not immediately clear how the bankruptcy petition would affect the proposed purchase. Representatives of 1800mattress.com were not available this morning for comment.

The retailer was founded in 1976 as Dial-A-Mattress and originally made nearly all of its mattress sales over the phone. Currently, the company has about 40 bricks-and-mortar stores in addition to its telephone and Internet sales.

The bankruptcy petition does not involve a 1800mattress.com franchise group that covers markets in New England, Philadelphia, central and southern New Jersey and Florida.

Bob Klein, president of the franchise group, said his company is independent of the franchisor and is unaffected by the petition.

"We are not involved in any way, and it is business as usual for our customers," Klein said. "There is no impact whatsoever on our ability to purchase product, make sales and deliver to our customers."

He said his company has separate contracts with Sealy, Serta, Simmons, Spring Air and Tempur-Pedic and is current on all payments. His company has its own call center in suburban Boston and its own fleet of delivery trucks.