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Court approves Classic Sleep sale

By Larry Thomas -- Furniture Today, February 22, 2010

BALTIMORE —

A U.S. Bankruptcy Court judge here has approved the sale of specialty bedding producer Classic Sleep Products to a new company formed by Classic management and the producer's Chinese manufacturing partner.

The move came less than a month after Classic filed for Chapter 11 bankruptcy protection.

The company said Classic's current management team, led by CEO Mike Zippelli, will increase its majority stake in the business with funding provided by JMX Capital Partners and Classic's senior lender, CIT Commercial Services.

JMX is partially owned by Xiong Yu of Delandis Trading Corp., Classic's longtime manufacturing partner in Fujian, China.

The parties are contributing $10 million to recapitalize the company, which is now called Classic Brands LLC, Zippelli said.

“We see this move as a very exciting opportunity to solidify Classic's position as one of the leading value brands in the United States,” he added. “This strong infusion of capital will strengthen our current business and position the company for dynamic future growth.”

The sale is expected to close in the next several weeks, after which Classic should emerge from Chapter 11 protection.

When Classic filed for bankruptcy protection on Jan. 4, it listed assets of $7.1 million and liabilities of $8.8 million. Unsecured creditors are owed $4.5 million, according to court documents.

The largest unsecured creditor is Wonderlink International, a Hong Kong-based supplier of memory foam that is owed $2.4 million.

The next largest is components supplier Leggett & Platt, which is owed $511,953. In addition, latex foam supplier Latexco Tielt is owed $272,380 and polyurethane foam supplier Foamex is owed $232,843, according to court filings.

Classic Sleep sells bedding and accessories under the Dormia, Space Age and Natural Expressions brands. It is showing here this week in World Market Center B-970.

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Court approves Classic Sleep Products sale

Feb 1, 2010

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