Sale of Furniture Brands speeds up
Furniture Brands International Inc. has accelerated the timetable for the auction of its assets, cutting two weeks from the time for potential new bidders to complete the work needed to put together a bid.
The U.S. Bankruptcy Court approved Furniture Brands’ request to move the auction for its assets to 10 a.m. Nov. 21 from the initial date of Dec. 10. Qualified bids now must be submitted by 9 a.m. Nov. 20, and the sale is scheduled to close on Nov. 22, just two weeks from today.
The decision to move up the auction came several days after Samson Holding Ltd., based in Taiwan, said it would enter the bidding.
It is not clear whether the emergence of the potential Samson bid spurred Furniture Brands’ decision, but a speeded-up auction process sometimes doesn’t allow enough time for other bidders to learn enough about the company to put together a bid that can prevail, said Melissa Jacoby, who teaches commercial and bankruptcy law at the University of North Carolina at Chapel Hill, in an interview in September.
The current leading bid is $280 million bid by KPS Capital Partners, a private equity firm based in New York. The entrance of Samson or others into the bidding would benefit creditors and pensioners of Furniture Brands if it would drive up the price of the company.
Furniture Brands said in a statement that the faster auction would be best.
“The company believes the accelerated timing will improve the recovery, minimize the costs associated with the restructuring, and provide greater certainty to all stakeholders,” the statement said.
The company filed for Chapter 11 protection Sept. 9 and has more than $200 million in underfunded pension obligations for about 20,000 participants.
Furniture Brands in the early 2000s was the largest U.S. furniture manufacturer at $2.2 billion in annual sales, primarily from Broyhill, HDM and Thomasville.
But it had seen eight years of revenue declines, in the past 12 years, Furniture Brands has eliminated at least 8,860 jobs in North Carolina in pursuit of lower labor costs in Asia that have not contributed to increased sales.