Jennifer Exits Bankruptcy
Clint Engel -- Furniture Today, March 4, 2011
WOODBURY, N.Y. — Jennifer Convertibles has emerged from Chapter 11 bankruptcy protection, controlled by its largest supplier and with a new CEO replacing former chief Harley Greenfield.
Chinese supplier and creditor Haining Mengnu Group received about 90% of Jennifer Convertibles' new stock. The rest will be distributed to certain other former creditors, the company said in a press release.
The new management team is led by CEO Gebing (Morris) Zou and President Rami Abada, who was president of the company before the July 18 Chapter 11 filing.
"This is an important day for Jennifer Convertibles," Abada said in a statement. "We are emerging as what we believe to be a stronger organization that will better satisfy its customers, suppliers and employees. We have worked diligently to maximize recovery for our creditors, while maintaining our focus on our core business of delivering quality home furnishings to our customers. We are confident that our superior supply chain will not only provide our customers with great value but also great style and quality."
Neither Greenfield nor Abada returned calls seeking further comment.
The company emerged with 64 Jennifer Convertibles sofasleeper specialty stores and eight Jennifer Leather stores as well as six licensed Ashley Furniture HomeStores in greater New York.
Jennifer filed for bankruptcy this past summer, listing assets of about $26 million and debts of $46.4 million. In addition to Haining Mengnu, other large unsecured creditors in the industry were Ashley - which had a $1.4 million claim and objected to Jennifer's reorganization plan - Klaussner, and former manufacturer Stratford/Caye.
Under the reorganization plan filed in November, Haining Mengnu was to get 90.1% in new common stock in exchange for its $14.9 million unsecured claim as well as 30% of proceeds under a litigation trust set up to benefit unsecured creditors.
Other unsecured creditors would receive a 9.9% stake in the new company and 70% of any litigation trust proceeds. The plan said the new Jennifer would fund the trust with $100,000 in cash. The former Jennifer stock is now worthless.
Serving on the retailer's board of directors, in addition to Zou and Abada, are Herb Hester, who was CEO of Stratford/Caye; James Jiang and Yaoxiang Yue.
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