North Carolina case goods maker Linwood Furniture in Chapter 11
March 7, 2012-- Furniture Today,
LINWOOD, N.C. — Case goods manufacturer Linwood Furniture, which opened in 2006 to keep production of North Carolina artist Bob Timberlake's licensed furniture in the U.S., has filed for voluntary Chapter 11 bankruptcy protection.
In the March 5 filing in U.S. Bankruptcy Court in Winston-Salem, N.C., the company lists about $3.7 million in assets - including $2.5 million worth of inventory and $719,855 in accounts receivable - and $6.9 million in debt.
Among its top creditors, Linwood lists about $2.8 million in unsecured claims, with Kepley Frank Hardwood Co. owed $774,718, followed by Columbia Panel, owed $524,570.
The filing lists equity holders as Linwood Capital, owning a 60% share of the company, and Linwood Inc., owning a 40% share.
Court documents also said Jeff Schwall was being promoted to president of the company. He was named executive vice president of sales and marketing last year.
Schwall said in an interview with Furniture/Today that the company plans to continue production at the facility in both residential and hospitality businesses.
The factory was built for long runs of repeat production, he said, and when new management came to the company in 2011, hospitality provided a niche to provide that volume.
"We were over our head in accepting contracts for hospitality business and we weren't making money at it," Schwall said. "The beauty of what we have is the made-in-America model is something everybody wants right now ... but we can't run it in this big hog and run that kind of high-volume, low-margin product anymore. We've having to restructure the company to be sleeker."
Full time staff has not been affected by the move, but the company has laid off many temporary workers, he added. He added that the company's investors encouraged it to restructure.
At its launch in 2006, Linwood was a joint venture of Kepley-Frank Hardwood Co. and Bob Timberlake Inc., with the intention of keeping production of Bob Timberlake furniture in the former Lexington Home Brands Plant No. 2 here, which Lexington had closed the previous year.
Timberlake and Century Furniture announced a licensing partnership in 2011, ending a 20-year association with Lexington. The Linwood factory still makes some Timberlake product for Century, Schwall said.
Mike Mebane continues as CEO of the company.
Dean Powell, a former Broyhill executive, was hired on the bankruptcy filing date as executive vice president of operations.