UPDATE: Furniture Brands International files for Chapter 11 protection
September 9, 2013-- Furniture Today,
ST. LOUIS — Furniture Brands International has filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Delaware. (See updated article about Lane assets.)
In a release, the company also said it is pursuing a sale to affiliates of funds managed by Oaktree Capital Management L.P. Under the agreement, "Oaktree will acquire substantially all of the assets of Furniture Brands except the company's Lane business, through a court-supervised auction process," subject to court approval and other conditions.
"This bid will serve as a starting point for a sale process for the company, which may include other bidders," the release said. (See video at bottom of page with Ray Allegrezza, editor-in-chief of Furniture/Today).
Furniture Brands also is evaluating sale alternatives for the Lane business, it said, "and has received several indications of interest from potential acquirers."
Oaktree also has committed to $140 million in debtor-in-possession financing, including $50 million of new liquidity, the company said, that "will enable the company to operate business uninterrupted and continue to meet its financial obligations, including the timely payment of employee wages and benefits, continued servicing of customer orders and shipments, and other obligations," the company said.
"After careful consideration of a range of alternatives, we firmly believe that our Chapter 11 process represents the best long-term solution for Furniture Brands to address its liquidity challenges, strengthen its operations and continue to provide our customers with the highest quality products and service that they have come to expect from us," Chairman and CEO Ralph Scozzafava said.
"Our portfolio includes some of the most well respected brands in the furniture industry, and we are pleased to be partnering with Oaktree, which has deep experience working with Furniture Brands and other companies in our industry. We are highly confident that as a result of these actions, we will protect our valuable franchise and emerge as an even stronger company."
Asked if Scozzafava and the rest of the FBI's executive team would stay on under the proposed acquisition, a spokesman said it's too early to comment, but also noted that Oaktree is a financial buyer that would need management.
Check back with FurnitureToday.com for updates.
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