1800mattress.com now pursuing sale to Sleepy's
Deal would unite two New York-based bedding chains
Larry Thomas -- Furniture Today, March 24, 2009
Click here to read an updated version of this story.
NEW YORK — Retailer 1800mattress.com has asked a U.S. Bankruptcy Court judge to convert its bankruptcy case into a Chapter 11 reorganization to pave the way for a sale to rival Sleepy's.
Last week, three of 1800mattress.com's creditors had filed a petition to force the company into Chapter 7 bankruptcy liquidation. In documents filed with the court late Tuesday, the retailer indicated it had reached tentative agreement to sell the company to Sleepy's as part of a Chapter 11 bankruptcy reorganization.
Judge Dennis Milton has scheduled a hearing for Thursday morning on the retailer's request.
According to court documents, Sealy, one of two mattress producers filing the original Chapter 7 petition, is 1800mattress.com's largest unsecured creditor. The company is owed $1.19 million. Comfort Solutions licensee Blue Bell Mattress, also known as King Koil Northeast, is the other producer seeking Chapter 7 for the retailer and is owed $504,858.
Details of the agreement with Bethpage, N.Y.-based Sleepy's were not included in the court filings. But 1800mattress.com said a sale to its longtime rival would complement Sleepy's extensive network of bricks-and-mortar stores.
1800mattress.com is best known for selling mattresses over the telephone, but in recent years it has opened bricks-and-mortar stores of its own and aggressively pursued Internet sales through Web sites such as Amazon.com and Walmart.com.
Shortly before the Chapter 7 petition was filed, 1800mattress.com announced it had signed a letter of intent to sell the company to an investor group let by mattress industry veteran Ken Mazda. That proposed deal was not mentioned in the latest court filings.
Industry companies listed among the 30 largest unsecured creditors of 1800mattress.com, also known as Dial-A-Mattress, include:
Sealy Inc., owed $1.19 million
Serta Mattress Co., $913,003
King Koil Northeast, $504,858
Simmons Mfg., $475,183
Tempur-Pedic, $315,614
Rex Bedding Sleep Products, $190,338
L&P Financial Services, $164,170
S&S Mattress Distribution, $95,798
Knickerbocker Bed, $78,572
Southern Textiles, $72,491
Magniflex USA, $59,638
Serta Mattress Co.-Moreno Valley, $58,405
Steinreich Communications, $53,620
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