ST. LOUIS, MO -- Furniture Brands International has entered into an asset purchase agreement with KPS Capital Partners L.P. to acquire substantially all of FBI's assets for $280 million, including the Lane business. The news was announced Oct. 3.

FBI filed for Chapter 11 on Sept. 9. This latest "stalking horse" bid by KPS was approved by the court and includes enhanced terms on DIP (debtor in possession) financing. KPS has committed to fund up to approximately $190 million as the DIP lender, replacing Oaktree Capital Management.

According to a statement by FBI, the acquisition agreement does allow additional bidders to enter the auction process with KPS. The auction deadline is Dec. 10, with bids due Dec. 5.

"The KPS bid for our business establishes a solid foundation as we move toward a successful emergence from Chapter 11. The KPS bid also enhances our creditors' return with a higher total price as well as enhanced DIP financing terms. We are also pleased that KPS has extended an offer of employment to substantially all of our current employees,"  Ralph Scozzafava, Chairman of the Board and CEO of Furniture Brands said in a statement.

The company's brands include: Thomasville, Broyhill, Lane, Drexel Heritage, Henredon, Pearson, Hickory Chair, Lane Venture, Maitland-Smith and LaBarge.

"The continued interest in the company and brands demonstrates their significant value," Scozzafava added. "We will continue to work diligently through this reorganization process to serve the best interest of our stakeholders including our customers, dealers, employees and partners. We believe this enhanced bid illustrates the long term merits of our future as a healthy, standalone business and our ability to emerge from this process as a strong standalone business going forward."

Revenues for the residential and contract furniture manufacturing giant declined during the downturn and the company has struggled to recover, recording a $59 million loss for the first six months of the year. 2012 net sales were $1.07 billion.