Two weeks after Furniture Brands International (FBI) delisted from the New York Stock Exchange, it has filed Chapter 11 and is pursuing a sale process. Oaktree Capital Management has entered an asset purchase agreement to acquire all of the company's assets except the Lane business—a starting point for a sale process for the company, which may include other bidders.
Oaktree has committed $140 million in financing, including $50 million of new liquidity, subject to court approval. This will enable FBI to operate business uninterrupted and continue to meet its financial obligations, including the timely payment of employee wages and benefits, continued servicing of customer orders and shipments, and other obligations.
FBI expects to complete an auction to sell the Lane business within 30 days, although it didn't identify a buyer.
"After careful consideration of a range of alternatives, we firmly believe that our Chapter 11 process represents the best long-term solution for Furniture Brands to address its liquidity challenges, strengthen its operations and continue to provide our customers with the highest quality products and service that they have come to expect from us," said Ralph Scozzafava, Chairman of the Board and CEO of Furniture Brands. "Our portfolio includes some of the most well respected brands in the furniture industry, and we are pleased to be partnering with Oaktree, which has deep experience working with Furniture Brands and other companies in our industry. We are highly confident that as a result of these actions, we will protect our valuable franchise and emerge as an even stronger company."
"We appreciate the continued support of our customers and suppliers during this process. We value our relationships with them and look forward to continuing those relationships for many years to come," said Scozzafava. "We also appreciate the dedication and loyalty of our talented employees, whose support is, and always will be, critical to our success and to the future of the Company."
Miller Buckfire and Company, LLC is acting as investment banker for the Company; Alvarez and Marsal North America, LLC is acting as restructuring advisor and Paul Hastings LLP is the Company's legal counsel.