Norwalk Furniture still hopeful of deal

Closing deadline passes, but doesn't cancel sale

Gary Evans -- Furniture Today, August 19, 2008

NORWALK, Ohio - Norwalk Furniture said Monday that it continues to operate despite missing the closing date Friday on its proposed sale to two investment groups.

The initial letter of intent called for an Aug. 15 closing but the company said it "has been determined that the date was too aggressive and that more time will be needed to finalize the sale."

Norwalk spokesman Joe Mosbrook said the companies need more time to do due diligence, and the two-week period leading to the sale date were not enough. The release Monday said, "It is important to note that the expired deadline does not cancel the sale."

The company said it continues to take orders as it works to finalize its sale to IRG Capital Group and Blackbird Capital Partners. The proposed sale came after Norwalk's lender, Comerica, called in an $11 million loan, forcing the manufacturer to close briefly.

In addition, the release said that Charles Rowe, the IRG manager who was to act as interim chief restructuring officer, will not continue in that role but will be involved in the transaction. A new chief restructuring officer is expected to be named in the near future. Mosbrook said that Rowe's former position as interim chief "was not a good fit" with the restructuring plan.

The release, at least in part, came in reaction to a Sunday story in the Norwalk Reflector newspaper that indicated investors backed out of the deal to acquire the 106-year-old upholstery maker. The story, later revised, was based on an e-mail to employees from Norwalk Furniture Chairman Jim Gerken and his cousin, Bill Gerken, vice chairman, that said the deadline for the sale had passed with the agreement unsigned.

"The company believes that Blackbird and IRG remain interested in the company," the Gerkens said in the e-mail. "The company intends to continue its discussions with its creditors and its efforts to restructure. We remain very optimistic during these difficult times. We will continue to keep everyone updated as developments arise."

IRG Capital is an Akron, Ohio-based investment group that developed a $900 million project in Akron that will include the new international headquarters for Goodyear Tire & Rubber Co. It is owned by Industrial Realty Group of Downey, Calif. IRG's president, Stuart Lichter, has been quoted as saying Norwalk would be a good fit with his organization and could be a strong company.

Of interest to Lichter, according to earlier reports, is an empty manufacturing facility in Tennessee that IRG could convert to other uses.