Tombigbee Electric Power Association and other utility providers in Northeast Mississippi are owned hundreds of thousands of dollars by Furniture Brands International, the parent of Lane Furniture Industries.
At the time of FBI’s bankruptcy filing Sept. 9, Lane employed some 1,400 people at its manufacturing sites in Belden and Saltillo, office and warehouse in Verona and distribution center in Wren.
In a filing last week with the bankruptcy court in Delaware, Tombigbee EPA, Lee County and Okolona Electric said they’re owed nearly $600,000 by Lane. They also say FBI’s request to set aside less than $900,000 for utility costs is not enough to spread around with 120 utility companies seeking payment from the company.
Furniture Brands filed a motion after its Sept. 9 Chapter 11 bankruptcy petition asking the court to prohibit utilities from altering, refusing or discontinuing services.
In court documents, the utilities noted the following:
• Tombigbee provides electricity to Lane, which owes $510,000 under 13 different accounts. In recent months, Lane’s usage has been $200,000. Lane is on 30-day billing cycle, which means it will hav eabout two months of usage outstanding at any given time, leaving Tombigbee with exposure of about $400,000. TEPA is asking for adequate assurance of future payment in the form of a cash deposit or earmarked funds in amount of $300,000.
• Lee County provides water and sewage to Lane, which owes the county about $17,700 in connection with water and sewage. In recent months, Lane’s usage is about $3,700. Lane also has two months usage outstanding at any given time, leaving it with exposure of about $7,400. LC has asked for adequate assurance of future payment in the form of deposit or ear-marked funds in amount of $6000.
• Okolona Electric provides electricity to Lane, which owes OE $63,700 in connection with electricity provided to three Lane accounts. Lane’s recent usage is about $30,000. Most rent meter reading reflects usage of over $21,000 for 9-day period prior to Petition date. Lane has about two months outstanding t any time, giving Okolona Electric exposure of about $60,000. It held security deposit of $48,000 and has asked for assurance of $60,000.
The three entities say Furniture Brands utility deposit account was underfunded from the outset, and is only enough for only two weeks of usage. Also unclear is how utilities can access funds. And there doesn’t appear to be limit to how much utility provider can get, which means it can be quickly depleted by large customers.
So they’re asking the court to deny Furniture Brands’ motion.
A hearing is set Wednesday for the bankruptcy court to consider several motions.