Furniture Brands International will be in bankruptcy court in Delaware on Wednesday, as a judge will
Among them: Oaktree Capital Management‘s larger bid for the company and its assets – including Lane.
After filing for Chapter 11 bankruptcy protection on Sept. 9, Furniture Brands had said it favored a bid by Oaktree for $166 million, including $140 million in financing, plus the assumption of other liabilities. But that bid did NOT include Lane Furniture.
But after KPS Capital Partners offered a higher bid, which included Lane, and a bidding war of sorts has ensued.
In court documents, Furniture Brands says it favors Oaktree’s latest bid of $260 million. However, the unsecured creditors’ committee has balked and said it favors KPS’ even higher bid of $280 million.
And in both new bids, Lane Furniture is included in the bids, a hopeful sign for the 1,400 Lane employees in Northeast Mississippi.
Said Furniture Today “The total of both bids includes the company’s Lane assets, which Furniture Brands originally had said would be sold separately from Thomasville, Broyhill, Drexel Heritage and other brands. Oaktree’s bid, however, still leaves room for a Lane sale prior to Oaktree’s obtaining FBI’s assets.”
In addition, Furniture Today said:
KPS indicated it is only interested in the transaction if Lane continues operations and will not participate in any future auction if it is not the stalking horse bidder.
“The actions of the debtor ( Furniture Brands International) since the petition date have evidenced to Lane employees, customer and vendors the intention to liquidate Lane,” the KPS proposal letter said.
The unsecured creditors committee said that accepting the low Oaktree bid is an unsound decision and that the KPS asset purchase agreement offer represents “materially better terms than the Oaktree agreement.” The committee also wants more oversight of its bankruptcy budget.