Levitz Home Furnishings, Inc. Seeks Chapter 11 Protection to Enable Restructuring
Furniture World News
Levitz Home Furnishings, Inc. announced that it has filed for protection under chapter 11 of the U.S. Bankruptcy Code in the Southern District of New York. The company will continue to operate its retail furniture stores in the ordinary course of business while it restructures. The company has arranged and sought Bankruptcy Court approval for a $90 million debtor-in-possession credit facility led by GE Commercial Finance, which includes an incremental credit facility of $25 million arranged by Prentice Capital Management LP and provided by its affiliates. These facilities will provide the company with sufficient liquidity to operate its business on an ongoing basis.
"Today's steps are part of an important process to strengthen Levitz Home Furnishings," said C. Mark Scott, President and acting Chief Executive Officer of Levitz Home Furnishings, Inc. "With the commitment of financing from an experienced retail specialist like Prentice Capital Management in place, we are able to implement a restructuring plan that will provide us a platform for future success. Our stores are open for business, and we appreciate the support of our valued customers, vendors, lenders and employees."
The company stated that its filing was commenced in order to complete the cost-saving and other initiatives that began in April 2005 and to provide customers, vendors and employees with the certainty of performance that they deserve. The company will reap the benefits of these initiatives through the infusion of $25 million in near-term financing and the opportunity to raise additional capital through a chapter 11 reorganization or sale as a going concern. These initiatives have already reduced costs by almost $40 million through the rebranding of certain Seaman's stores under the Levitz name, the elimination of supply chain inefficiencies, and the reduction of general overhead expense. The filing will also allow the company to rationalize its capital structure, review its operations and make market decisions that maximize value for all parties and ensure that the company remains a leading furniture retailer for years to come.
To ensure a smooth transition into bankruptcy and minimize the effects on its ordinary business operations, the company also has filed for Bankruptcy Court approval of various "first-day" motions. In order to ensure that customers are not adversely affected by the company's transition into chapter 11, the company has requested that the Bankruptcy Court approve its plans to continue all customer programs, including fulfillment of existing orders and honoring of deposits. The company has also asked the Court to authorize it to maintain payroll and employee benefits, and implement a severance program in the event that any employees are laid off in the course of its restructuring.
The company will provide updates regarding ongoing operations plans as they become available. The case number for Levitz's filing with the U.S. Bankruptcy Court for the Southern District of New York is #05-45189, and the Court's web site is http://www.nysb.uscourts.gov/ .
About Levitz Home Furnishings, Inc.
Levitz Home Furnishings, Inc. is a leading specialty retailer of furniture in the United States with 121 locations in major metropolitan areas principally the Northeast and on the West Coast of the United States. Additional information about the company and its brands is available at http://www.levitz.com/ .
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