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 Bankruptcy Draws Bidders, Creditors - See more at: http://www.woodworkingnetwork.com/search?keyword=Furniture+brands&x=0&y=...
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
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