Shermag Files for Protection from Creditors

May 5, 2008  by in UnCategorized   

By Home Furnishings Business in on May 2008 Furniture manufacturer Shermag Inc., Sherbrooke, Quebec, announced Monday that it has applied for creditor protection under the Companies’ Creditors Arrangement Act (CCAA) of Canada in the Québec Superior Court. Shermag’s subsidiaries, Jaymar Furniture Corp., Scierie Montauban Inc., Mégabois (1989) Inc., Shermag Corp. and Jaymar Sales Corp., also will also be covered by the CCAA filing.

According to its most recent report, for the nine months ended Dec. 28, 2007, Shermag’s revenue was down 37 percent from the prior year to $83.7 million. The company lost $29.9 million (Canadian) during that time, compared to a prior-year nine-month of $13.2 million. Shermag’s showroom was closed during the recent High Point Market.

The CCAA protection will stay creditors, suppliers and others from enforcing any rights against Shermag and will afford Shermag the opportunity to restructure its affairs.

Shermag will continue operations during the CCAA proceedings under the leadership of its existing management team. The Company has made arrangements with Wachovia, its current lender, to ensure continued financing.

RSM Richter Inc. is the proposed court-appointed monitor for the CCAA proceedings and will monitor Shermag’s ongoing operations, assist with the development and filing of a plan of compromise and arrangement with its creditors and other stakeholders, liaise with creditors, customers and other stakeholders and report to the court. The monitor also will post the court filings and other information relating to Shermag on its Web site, www.shermag.com .