Cisco Bros. restructuring with Chapter 11 filing
Gary Evans -- Furniture Today, May 19, 2011
LOS ANGELES — High-end upholstery maker Cisco Bros. filed for Chapter 11 bankruptcy protection last week in Los Angeles as part of a restructuring plan, the company said.
In a prepared statement, the company said it was able to maintain its position in the marketplace during the recession and increased sales in 2010 but was now unable to meet certain real estate loan obligations.
Cisco Pinedo, the company's founder and president, said, "We've been through riots, survived fires and we will overcome this. There have been signs of recovery through increase of sales, and we're very thankful to our loyal customer base.
"However, prior to the economic turndown, the company guaranteed certain real estate loans," he added. "These real estate loans have been unable to meet their obligations, which have increased the company's cash demands. After reviewing the situation, it has become clear that a formal restructure is necessary."
The company's business consultant, Thomas Safian, said, "Many banks are using cross-collateral guarantees to call in outstanding commercial real estate loans and eliminate lines of credit in an effort to buoy their own balance sheets just at a time when many business need these funds to complete their restructuring. As a result, these companies suddenly find themselves without the resource reserve to meet ongoing costs and debt maintenance."
In statements to the court, officials said the company's revenues declined during the recession from $18 million in 2006 to $7.5 million in 2009, but rebounded to $9.7 million last year.
Cisco Bros. was one of the first upholstered furniture manufacturers to recognize the "green" movement, and uses eco-friendly components in its line.
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Cisco Bros. files Chapter 11, plans to restructure
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