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From Home Furnishing Business
Furniture Brands Gets New Lead Bidder
October 3,
2013 by in Bankruptcy, Industry, Legal 
Oaktree Capital has been edged out as the lead bidder in the bankruptcy auction of Furniture Brands International's assets by KPS Capital Partners who put in a $280 million offer.
The New York-based private-equity firm will also replace Oaktree as the bankruptcy lender after U.S. Bankruptcy Judge Christopher Sontchi granted the furniture maker’s request on an interim basis at a hearing Wednesday in Wilmington, Del.
Oaktree’s initial loan will be repaid.
KPS’s bid has “better terms, a higher amount and lower breakup fee,” Luc A. Despins, an attorney for Furniture Brands, told the judge. “The law is clear and our hands are tied and we need to accept the higher and better offer.”
Furniture Brands, maker of the Broyhill, Lane and Thomasville home-furnishing lines, also won on Wednesday court approval of guidelines that will govern its sale process.
The company will hold an auction on Dec. 10 to determine if there are any better offers, followed by a Dec. 12 hearing to seek approval of the sale. Other bids must be submitted by Dec. 5.
The KPS offer is superior to Oaktree’s with “$20 million more in the headline amount,” better terms and no adjustments, Mark T. Power, an attorney for unsecured creditors, said at the hearing. KPS “intends on operating the entire business” and virtually all current employees will be offered jobs, he said.
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Source: St. Louis Post-Dispatch