Cisco Bros. Files Chapter 11

May 2, 2011  by in UnCategorized   

By Home Furnishings Business in Bankruptcy on May 3, 2011 High-end upholstered furniture maker Cisco Bros. has filed for Chapter 11 in Los Angeles as part of a restructuring plan.

In a prepared statement, the company said it was able to maintain its position in the marketplace during the recession and increased sales for the previous year but is now unable to meet certain real estate loan obligations.

"We've been through riots, survived fires and we will overcome this," said Cisco Pinedo, the company's founder and president. "There have been signs of recovery through increase of sales, and we're very thankful to our loyal customer base.

"However, prior to the economic turndown, the company guaranteed certain real estate loans," he added. "These real estate loans have been unable to meet their obligations, which have increased the company's cash demands. After reviewing the situation, it has become clear that a formal restructure is necessary."

"Many banks are using cross-collateral guarantees to call in outstanding commercial real estate loans and eliminate lines of credit in an effort to buoy their own balance sheets just at a time when many business need these funds to complete their restructuring," said Thomas Safian, a Cisco consultant. As a result, these companies suddenly find themselves without the resource reserve to meet ongoing costs and debt maintenance."

In statements to the court, officials said the company's revenues declined during the recession from $18 million in 2006 to $7.5 million in 2009, but rebounded to $9.7 million last year.

Cisco Bros. was one of the first upholstery companies to recognize the "green" movement and began using eco-friendly components in its line of fashion-forward upholstery. The company continued this movement by acquiring an old textile mill in High Point and turning it into a showroom using as many reclaimed materials as possible.