RoomStore emerges from Chapter 11
After a nearly five-year restructuring
By Furniture Today Staff -- Furniture Today, June 7, 2005
RICHMOND, Va. — Top 100 retailer RoomStore said today it has emerged from Chapter 11 bankruptcy protection after a nearly five-year restructuring.
The Richmond-based retailer, which has 65 stores in Pennsylvania, Maryland, Virginia, North Carolina, South Carolina and Texas, said that under its reorganization plan, the existing equity interest in the company will be canceled. Unsecured creditors in RoomStore will receive new common stock in satisfaction of their claims, which will give former RoomStore parent Heilig-Meyers — the largest creditor — about 67% of the stock.
Under the plan, RoomStore also has a new $35 million working capital facility with Bank of America.
Curtis Kimbrell, RoomStore president and CEO, thanked the company’s employees, customers, suppliers and creditors’ committee for their work and support during the reorganization.
Kimbrell is one of five members of a new board of directors. The four independent directors are Robert Shaffner, Ronald Kaplan, Eugene Davis and Martin Stringer. Shaffner is the former chief financial officer of manufacturer Klaussner Furniture Inds. and Kaplan is a former president of retailer Levitz. Davis and Stringer have “financial savvy and capital markets knowledge,” Kimbrell said.
He added that during the restructuring, RoomStore was able to maintain and strengthen relationships with many vendors, expanding credit lines and payment terms with key suppliers.
“Our strong balance sheet and working capital facility are more than adequate to support the business operations as well as expansion plans within our current markets,” Kimbrell said.
Separately, Heilig-Meyers filed an amended reorganization plan in U.S. Bankruptcy Court here, noting its 67% interest in RoomStore is expected to go into a liquidation trust. Assets in the trust would be liquidated and distributed to resolve outstanding claims. The company said it will ask its creditors to vote to approve the plan.
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