Furniture Brands files for Chapter 11 bankruptcy protection
Well, there’s this, following the news that Furniture Brands could be laying off more than 1,400 workers at Lane next month: The company has filed for Chapter 11 bankruptcy protection.
Here’s the press release:
Furniture Brands International (OTC: FBNI) and certain of its wholly-owned subsidiaries (collectively, Furniture Brands), announced today that it has filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The Company also announced today that in conjunction with the filing, it is pursuing a sale process under Section 363 of the Bankruptcy Code.
To this end, Furniture Brands has entered into an asset purchase agreement with affiliates of funds managed by Oaktree Capital Management L.P. (Oaktree), which it intends to submit to the Court. 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 Bankruptcy Court approval and certain other conditions. This bid will serve as a starting point for a sale process for the company, which may include other bidders. In addition, the Company is engaged in a process to evaluate sale alternatives for the Lane business, and has received several indications of interest from potential acquirers. Oaktree is a leading institutional investor with deep experience working with companies in situations similar to Furniture Brands.
Furniture Brands also announced that it has received a commitment from Oaktree for $140 million in Debtor-in-Possession (DIP) financing, including $50 million of new liquidity. The new facility, which is subject to court approval, 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.
“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,” said Ralph Scozzafava, Chairman of the Board and CEO of Furniture Brands. “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.”
“We appreciate the continued support of our customers and suppliers during this process. We value our relationships with them and look forward to continuing those relationships for many years to come,” said Scozzafava. “We also appreciate the dedication and loyalty of our talented employees, whose support is, and always will be, critical to our success and to the future of the Company.”
Miller Buckfire and Company, LLC is acting as investment banker for the Company; Alvarez and Marsal North America, LLC is acting as restructuring advisor and Paul Hastings LLP is the Company’s legal counsel.
Additional information about the restructuring is available at the Company’s website www.furniturebrands.com. For access to Court documents and other general information about the Chapter 11 cases, please visit: http://dm.epiq11.com/FBN