PeopLoungers obtains $9.5 million in financing
Supports company’s restructuring moves
Gary Evans -- Furniture Today, June 5, 2007
NETTLETON, Miss. — Motion furniture manufacturer PeopLoungers said Tuesday that it has secured $9.5 million in financing to support its restructuring initiative.
The debtor-in-possession loan from Capital Business Credit of New York will allow the company to continue its operations, the manufacturer said.
The 28-year-old company filed for Chapter 11 protection last month, saying it owed more than $5.7 million to its 20 largest unsecured creditors.
PeopLoungers said that all of its creditors, and the bankruptcy court, showed support for the new credit facility and its operation budget. In addition, the company said it has hired the law firm of Harris, Jernigan and Geno to represent it during bankruptcy.
In a news release, PeopLoungers executives said they are streamlining the company to reduce costs. Management began a review of the entire operation early in April and has taken steps including updating production lines, combining job responsibilities and reducing employee headcounts. The process is expected to improve profitability, the company said.
The company also plans to sell its excess warehousing facility and real estate in Mantachie, Miss., to reduce fixed cost expenses.
“PeopLoungers Inc. continues not only to meet but also exceed its sales and expense plan,” the company said. “All motion products remain extremely viable and new market introductions have been well received by its 1,000 customer base accounts. Customers continue to increase their support for PeopLoungers’ motion products. PeopLoungers senior management team continues to be excited about the overall support for the company during its reorganization time.”
Earlier, President and CEO Jimmy Green called the bankruptcy filing “a necessary evil” that would allow the company time to reorganize.
According to documents filed in U.S. Bankruptcy Court in Aberdeen, Miss., Hickory Springs is the largest unsecured creditor at $1.97 million. The next two largest are Chinese furniture companies, Haining Mengnu Group and Haining Jinzheng Furniture, which are owed $1.1 million and $658,127, respectively.
Other industry suppliers on the creditors list include mechanism producer Omega, which is owed $393,210; foam producer Foamex, $256,794; and components supplier Leggett & Platt, $122,888.
Also on the list are three fabric producers. Culp Inc. is owed $86,584, while Global Textiles is owed $62,633 and Hanes Converting is owed $40,682.
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PeopLoungers in Ch. 11
May 20, 2007 -
PeopLoungers files for Chapter 11 protection
May 15, 2007 -
PeopLoungers expects to emerge from Chapter 11
May 17, 2007
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