WILMINGTON, DE - Furniture Brands bankruptcy, with valuable assets like Thomasville, Broyhill, Henroden and Lane on the docket, will draw a competing bid. KPS Capital Partners told the Wall St. Journal it will offer $166 million, besting Oaktree Capital Management's $140 million prepackaged offer.
The KPS Capital Partner's bid would include acquisition of Lane operations. Furniture Brands International had sought to sell that operation separately. KPS Capital, New York City, specializes in short term investment in turnaround businesses has investments in global consumer brands, including Wedgewood china and Waterford Crystal. In April it concluded raising $3.5 billion for special situation investments, such as turnarounds and restructurings similar to Furniture brands International.
Meanwhile, Bankruptcy Judge Christopher Sontchi approved Oaktree's interim financing package to allow Furniture Brands to continue operating its many furniture businesses on a "debtor in possession" basis. Judge Sontchi will rule in about a month on Oaktree's bid to acquire Furniture Brands, weighing KPS Capital Partner's bid, and any others that arise in the interim.
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 is also bedeviled by a brewing shareholder class action lawsuit, following a suit filed August 6 in Philadelphia. Sales last year decreased 3.2% to $ 1.07 billion, less than half its high one time peak.
Furniture Brand bankruptcy court filings reviewed by Woodworking Network show a rapid pace of activity in the court, with high stakes creditors such as SAP America and General Electric Credit seeking individual representation in the case.The largest creditors include Asia-based furniture manufacturers, truckers and packagers. Georgia-Pacific is owed $651,000 for lumber; Hickory Springs Mfg. $589,000
The court must help resolve issues large and small for Furniture Brands to keep its businesses operating. Managers must seek approval for certain payments, such as workers' compensation insurance premiums, while postponing others.
Furniture Brands requested the court to prohibit utility firms from cutting off services, while Tombigbee Power filed a request to be represented directly in the case. Furniture Brands sought permission to pay sales and use taxes, continue extending credit to customers, and to pay critical vendors.
The list of the largest creditors includes an unspecified pension fund liability, then:
• $2.5 million to LF Products, Singapore
• $1.7 million to Shenzhen Polygrace Leather Miracles, Hickorym, 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