ST. LOUIS, Oct. 3, 2013 (GLOBE NEWSWIRE) -- Furniture Brands International ("Furniture Brands" or "the Company") today announced that it has entered into an asset purchase agreement with KPS Capital Partners L.P. ("KPS") to acquire substantially all of the Company's assets for $280 million, including the Company's Lane business.
In addition, Furniture Brands has filed a motion seeking authorization from the U.S. Bankruptcy Court for the District of Delaware the Honorable Judge Christopher S. Sontchi presiding, to conduct an auction process for the Company. Under Section 363 of the U.S. Bankruptcy Code, KPS would serve as the "stalking horse" bidder in the proposed auction, establishing a minimum value of the Company's assets.
The Court entered an interim order under which KPS will replace Oaktree Capital Management L.P. as the DIP lender to ensure its operations will continue uninterrupted and to set a final hearing for October 11, 2013.
KPS has committed to fund up to approximately $190 million as the DIP lender.
In order to maximize the asset price of the Company's brands, the acquisition agreement would allow for additional qualified prospective bidders to enter an auction process with KPS, in accordance with procedures established by the Court. The Court authorized the Company to proceed with an auction of the Company's assets on or before December 10, 2013, subject to the approved bidding procedures, and set December 5, 2013 as the deadline for any bids.
Ralph Scozzafava, Chairman of the Board and CEO of Furniture Brands commented: "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."
Scozzafava concluded: "The continued interest in the Company and brands demonstrates their significant value. 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."
Based on the current stalking horse bid, shareholders will not receive any distribution or recovery on account of their common stock.
Furniture Brands and certain of its affiliates commenced cases to reorganize under chapter 11 of the U.S. Bankruptcy Code on September 9, 2013. The chapter 11 cases are being jointly administered under case number 13-12329.
Furniture Brands International (OTC:FBNIQ) is a world leader in designing, manufacturing, sourcing and retailing home furnishings.
Furniture Brands markets products through a wide range of channels, including company owned Thomasville retail stores and through interior designers, multi-line/independent retailers and mass merchant stores.