Cisco Brothers exits Chapter 11
Gary Evans -- Furniture Today, August 13, 2012
LOS ANGELES - Upper-end upholstery maker Cisco Brothers says it has emerged from Chapter 11 bankruptcy.
The company, known for its efforts in promoting "green" upholstered furniture and for renovating an abandoned textile mill in High Point, filed for protection in April 2011. The bankruptcy court approved the emergence with an effective date in July.
"We were never really concerned about our viability and performance," Cisco Brothers founder and CEO Cisco Pinedo said. "We are quite pleased with our transition out of bankruptcy and look forward to the future with great optimism."
According to court documents, Cisco Brothers saw sales fall from $18 million in 2006 to $7.5 million in 2009 but had bounced back to $9.7 million in 2010 when its banks called in its loans and mortgages.
"That put an immediate strain on our cash flow, and even though we hated to do it, we had no choice but to file Chapter 11," Pinedo said.
At the time of the April 27, 2011 filing, Cisco Brothers sent letters to customers announcing its decision, explaining the reason for the filing, and assuring that the company would continue to provide product on schedule.
According to court doucments, unsecured crditors will be paid 5% of the amount they are owed in quarterly installments during the next five years. About $4.5 million in claims have been filed by unsecured creditors.
The reorganization plan also spells out payment plans for several secured creditors, as well as various government agencies that had filed claims for unpaid taxes.
Pinedo said the company will continue its efforts to revitalize Mill Village, a historic factory site occupying a 26-acre compound in High Point that was abandoned in the 1990s, and which houses the company's 20,000-square-foot High Point Market showroom and a distribution center.
"I'm hoping to restructure a mortgage agreement with our bank for Mill Village so that we can once again make this important piece of history a vital part of the community," said Pinedo.