Uph. maker Life Style files Ch. 11
By Gary Evans -- Furniture Today, July 2, 2007
Okolona, Miss. — Upholstered furniture maker Life Style Furniture has filed for Chapter 11 bankruptcy protection, saying it owes its top 20 unsecured creditors $3.6 million.
Danny Dempsey, president of the 24-year-old manufacturer, said the company ran into financial problems when several of its customers filed for bankruptcy and because of the industry-wide downturn in business. Its largest customer, Levitz, left more than $3 million in unpaid accounts
"We've been kicking this thing for a year, trying to get that volume back and get everybody paid," Dempsey said. "It came down to if we want to keep this company going, we have to (file). We hate it but we had to do it."
Dempsey said Life Style continues to ship product and doesn't expect interruptions. "We have a good plan worked out and the judge approved us using our cash collateral to continue operating," he said.
Life Style, which makes sofas in the $499, $599 and $699 retail price points, has an account base that includes several of Furniture/Today's Top 100 stores and also larger independents. The company's peak annual volume was $35 million, but sales are down to about $20 million, according to Dempsey.
"We're getting great support from our customers, employees and vendors," he said, adding that the company will show in Tupelo at the August market.
According to court documents, Line Style's largest unsecured creditor is Daewoo International Corp., a Korean fabric supplier, which is owed $1,095,461.
Other creditors include: Foamex, $633,585; Stewart's, $337,500; W.C. Stewart, $325,000; Morgan Fabric, $321,808; Danny Dempsey, $170,000; Omega Motion, $120,396; Market Square Furniture Plaza, $105,928; Premier Prints, $64,118; Sino Concod, Hong Kong, $62,444; RE Transportation, $56,088; M&M Planing Mill, $51,953; BMT Commodity Corp., $51,486; McNeely Plastic Products, $45,594; Southern Sales/BB&T, $42,706; Styleander Metal, $42,548; Huntington Fabrics, $39,996; Southern Components, $33,282; Design Resources, $33,164; and Murphree Frame Supply, $32,208.
