Furniture Brands gets interim OK for bankruptcy financing
Bloomberg Businessweek reports that Furniture Brands has received bankruptcy court approval for up to $115 million in financing to help fund operations.
The company, which on Monday filed for Chapter 11 bankruptcy protection, is looking to sell most of its assets – excluding Lane – to Oaktree Capital Management for $166 million. Furniture Brands would receive $140 million in financing as part of that package, but will have to wait until Oct 2 to hear if it gets the rest of it.
Furniture Brands said Monday it could lay off as many as 1,451 Lane employees, but said it is looking for a buyer for the company. It said there are interested buyers in the business.
According to Businessweek, another financing proposal has been offered by KPS Capital Partners, which forced Oaktree to better its terms, including reducing its fee.
And there’s this tidbit:
While Oaktree’s offer for all of the furniture lines except Lane remains at $166 million, it has agreed that if Lane sells for less than $49 million it can match that offer and pay cash to make up the difference. The $166 million offer can be submitted as a so-called credit bid allowing it to use forgiveness of debt to bid for the assets rather than cash.
KPS Capital Partners, which would buy Lane as well, said that it would be active as the bankruptcy advances. “We will be around, when we see the documents we may come forward with a better DIP, a better APA,” said Mark Thomas, a lawyer for the would-be lender and buyer, referring to debtor-in-possession financing and asset purchase agreement.
Also, Bloomberg said, the deadline for a sale to be completed as required by the bankruptcy financing was moved up about two weeks from 135 days after the bankruptcy was filed.