Furniture Brands Seeks $5 Million for Bankruptcy Exec Bonuses

By Bill Esler | Posted: 09/18/2013 10:18AM

 

Furniture Brands International Thomasville Broyhill Lane Henroden   WILMINGTON, DE - Lawyers overseeing Furniture Brands International bankruptcy and sale have requested retention and incentive bonuses of  $4 million or more from the Federal judge overseeing the case.

Furniture Brands, which filed for bankruptcy Sept. 9 in Delaware Federal Court, also requested permission to make payments of up to $65,000 a month for individual accounting firms and other professionals guiding the manufacturing conglomerate through its reorganization. Furniture Brands said in its filing it has 3,500 employees, and listed $547 million in assets and $550 million in liabilities.

The parent of Thomasville, Lane, Broyhill, Henroden, Maitland-Smith, HDM Furniture, along with Action Transport, has drawn two bidders already: KPS Capital Partners is expected to bid $166 million,  and Oaktree Capital Management already proposed a $140 million deal in its prepackaged bankruptcy offer. Oaktree's interim financing package to allow Furniture Brands to continue operating its many furniture businesses on a "debtor in possession" basis.

Bankruptcy Judge Christopher Sontchi permitted the court clerk to redact the request for executive and incentive bonuses, blanking out the names of the seven senior executives and 48 non-insider managers considered key to a successful management of the reorganization and sale. So the list of 55 Key Employee Incentive Plan (KEIP) and Key Employee Retention Plan (KERP) recipients is not yet public.

Just seven senior executives would share in the KEIP, which would generate a pool of $1.7 million for incentives "plus 3% of excess gross sale proceeds," according to the court document. For the KERP, those of the 48 designated employees who remain through the sale date of Furniture brands would shared in a pool of $2,174,747, according to the bankruptcy filing documents reviewed by Woodworking Network.

The complicated bankruptcy filing actually lists 18 entities filing bankruptcies - four for Broyhhill, three for Furniture Brands, three for HDM, three for Thomasville, three for Lane, plus Maitland-Smith and Action Transport, Inc. The cases are being jointly administered by the court. A Canadian business filed separately for bankruptcy.

A St. Louis-based residential and contract furniture manufacturing giant, Furniture Brands International  has been in steady decline during the downturn, and has struggled to recover. Furniture Brands lost $59 million in the first six months of the year, and took $11 million in impairment charges agains the value of its trade names and millions more in write downs on factories.

Furniture Brands International Broyhill, Lane, Thomasville,

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Furniture Brands is also threatened by shareholder class action lawsuits, following an August 6 case filing in Philadelphia. Sales last year decreased 3.2% to $ 1.07 billion, less than half its high one time peak. 

A meeting of creditors has been set for October 17, 2013, at 10:00 A.M. (ET), at the J. Caleb Boggs Federal Building, 844 King Street, 5th Floor, Room 5209, Wilmington, DE. The list of the largest creditors includes:
• $2.5 million to LF Products, Singapore
• $1.7 million to Shenzhen Polygrace Leather Miracles, Hickory, NC
• $1.5 million to Yash Technologies, India
• $1.4 million to Fookyik Furniture, Macau, China
• $1.2 Million Penske Truck Leasing
• $903,000 to Watkins & Shepard Trucking, Missoula, MT
• $827,00 to Rocktenn Packaging, Dallas

More creditors of Furniture Brands International are listed here>>

 

About the Author

Bill Esler woodworkingnetwork.com

Bill Esler

Bill Esler, Associate Publisher/ Editor in Chief, Woodworking Network Bill is responsible for editing Custom Woodworking Business and coordinating content for Wood Products , CLOSETS , WoodworkingNetwork.com, and related newsletters. Bill’s expertise includes using innovative print manufacturing techniques to grow audience engagement, digital printing, purls, QR codes; and lead-generating webcasts, custom websites, and custom digital and print content. Read Bill Esler's woodworking blogs. He can be reached at besler@woodworkingnetwork.com or follow him on Google+.

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wayne    
NC  |  September, 19, 2013 at 06:11 AM

Only in America would we allow the morons who have bankrupted a company to be paid a bonus for selling off the assets! Think of how $5 million could have benefited the 1,000+ employees laid off at Lane.$5,000 is pocket change to the pirates who continue to raid FBN but to the laid off employees, $5,000 would have been like money from heaven at a time when their futures are uncertain. It is no wonder that they asked the court to redact their names from their latest pilferage! I hope they sleep well knowing that while their judgement for these crimes against humanity may go unpunished here on earth that there will be a day of reckoning for them all.

Richard    
September, 22, 2013 at 04:07 PM

Assets are most likely seriously overstated. Inventories are probably bad and still on the books. This company probably has negative value with exception to the brands it owns. It appears many people will get hurt. Many people worked for years to make the brands owned by Furniture Brands great companies. Many of these people lost their jobs to outsourcing, have never recovered, and now could lose their pensions in part or possibly in total, who knows. Retirees need representation !

Mick    
TN  |  September, 19, 2013 at 06:57 AM

and the only American vendors on the list are the tucking companies that hauled the imports!

wayne    
nc  |  September, 20, 2013 at 06:48 AM

Not true Mike, there are several US companies in the debtor list although much farther down the line in debt size than the Chinese companies listed or the freight haulers. My company (in NC for over 50 years) stands to lose a pretty good sum. Although we don't like it we can weather the loss. The one's who can't are the American workers who have been tossed aside over the past 20 years and now most recently at Lane. Until Americans begin to demand US made products and reject imported crap this cycle will continure to repeat itself. All the corporate monster recognizes is $. Stop buying their imported stuff and move our money to those who manufacture here and the trend may begin to reverse itself. Believe it or not, there are still a lot of companies building furniture in the US at affordable prices.

wayne    
NC  |  September, 23, 2013 at 06:00 AM

The High Point paper came out at the end of last week and at long last, the clowns who have run FBN were publicly taken to task. I wonder where Jerry Epperson and the rest of the industry "Experts" are hiding during this debacle? Why are we not hearing anything from them? About 3 weeks before the FBN filing Jerry writes about why furniture stocks are such a great value and NEVER MENTIONED FBN! It is time for Furniture Today and other publications to stop being a corporate advertising space and actually report and comment on industry news.

 

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