Court: Other parties can bid on 1800mattress until May 16
By Larry Thomas -- Furniture Today, April 6, 2009
NEW YORK — The U.S. Bankruptcy Court in Brooklyn has granted retailer 1800mattress.com's motion to sell the company to rival Sleepy's, but has given other parties until May 16 to submit competing bids.
The bankrupt retailer and Sleepy's, the so-called stalking horse bidder, had asked for the bid deadline to be set about a month earlier. However, Judge Dennis Milton said he wanted to allow additional time for others who might want to bid more than Sleepy's $2.1 million offer.
If competing bids are submitted, an auction will take place May 18 and a court hearing to approve the sale would be the following day, according to an order signed by Milton.
The court order also says that Sleepy's and any other prospective bidder must notify 1800mattress.com, its franchisees and the creditor's committee by May 11 if it plans to assume the franchise agreements.
A franchise group has objected to the proposed sale to Sleepy's, arguing that the purchase price is inadequate and the deal would enrich 1800mattress.com founder Napoleon Barragan but leave nothing for unsecured creditors.
Two mattress producers and a landlord filed a petition March 17 to force 1800mattress.com into Chapter 7 bankruptcy liquidation, but the case was converted to a Chapter 11 reorganization on March 23 when the proposed deal with Sleepy's was announced.
