Furniture Brands International Inc., maker of the Broyhill, Lane and Thomasville home-furnishing lines, sought bankruptcy protection from creditors with a deal to sell most of its assets to Oaktree Capital Management LP.
The company, based in St. Louis, listed assets of $546.7 million and debt of $550.1 million in Chapter 11 documents filed in U.S. Bankruptcy Court in Wilmington, Delaware. Eighteen affiliates also already have sought or will seek court protection.
Oaktree has agreed to provide as much as $140 million in financing to help fund operations while the company pursues the sale, which will be subject to court approval and a supervised auction process that may draw other bidders, according to a company statement.
“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,” Chief Executive Officer Ralph Scozzafava said in the statement.
The Oaktree acquisition proposal doesn’t include the Lane brand. Furniture Brands said it’s engaged with other potential buyers for that line.
Furniture Brands plunged as much as 70 percent to 17 cents in over-the-counter trading after the filing was reported. The shares had dropped more than 92 percent this year before today.
© Copyright 2015 Bloomberg News. All rights reserved.