- Affiliates of Funds managed by Oaktree Capital
Management, L.P. Sign Asset Purchase Agreement and Agree to Provide
$140 Million in Debtor-In-Possession Financing
- Normal Operations Expected to Continue with No Impact
on Customers
Furniture Brands International (OTC:FBNI) and certain of its
wholly-owned subsidiaries (collectively, Furniture Brands),
announced today that it has filed voluntary petitions under Chapter
11 of the Bankruptcy Code in the United States Bankruptcy Court for
the District of Delaware. The Company also announced today
that in conjunction with the filing, it is pursuing a sale process
under Section 363 of the Bankruptcy Code. To this end,
Furniture Brands has entered into an asset purchase agreement with
affiliates of funds managed by Oaktree Capital Management L.P.
(Oaktree), which it intends to submit to the Court. Under the
agreement, Oaktree will acquire substantially all of the assets of
Furniture Brands except the company's Lane business, through a
Court-supervised auction process, subject to Bankruptcy Court
approval and certain other conditions. This bid will serve as a
starting point for a sale process for the company, which may
include other bidders. In addition, the Company is engaged in
a process to evaluate sale alternatives for the Lane business, and
has received several indications of interest from potential
acquirers. Oaktree is a leading institutional investor with
deep experience working with companies in situations similar to
Furniture Brands.
Furniture Brands also announced that it has received a
commitment from Oaktree for $140 million in
Debtor-in-Possession (DIP) financing, including $50 million of new
liquidity. The new facility, which is subject to court
approval, will enable the Company to operate business uninterrupted
and continue to meet its financial obligations, including the
timely payment of employee wages and benefits, continued servicing
of customer orders and shipments, and other obligations.
"After careful consideration of a range of alternatives, we
firmly believe that our Chapter 11 process represents the best
long-term solution for Furniture Brands to address its liquidity
challenges, strengthen its operations and continue to provide our
customers with the highest quality products and service that they
have come to expect from us," said Ralph Scozzafava, Chairman of
the Board and CEO of Furniture Brands. "Our portfolio includes some
of the most well respected brands in the furniture industry, and we
are pleased to be partnering with Oaktree, which has deep
experience working with Furniture Brands and other companies in our
industry. We are highly confident that as a result of these
actions, we will protect our valuable franchise and emerge as an
even stronger company."
"We appreciate the continued support of our customers and
suppliers during this process. We value our relationships with them
and look forward to continuing those relationships for many years
to come," said Scozzafava. "We also appreciate the dedication
and loyalty of our talented employees, whose support is, and always
will be, critical to our success and to the future of the
Company."
Miller Buckfire and Company, LLC is acting as investment banker
for the Company; Alvarez and Marsal North America, LLC is acting as
restructuring advisor and Paul Hastings LLP is the Company's legal
counsel.
Additional information about the restructuring is available at
the Company's website www.furniturebrands.com. For access to Court
documents and other general information about the Chapter 11 cases,
please visit: http://dm.epiq11.com/FBN
About Furniture Brands
Furniture Brands International (OTC:FBNI) 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. Furniture Brands serves its
customers through some of the best known and most respected brands
in the furniture industry, including Thomasville, Broyhill, Lane,
Drexel Heritage, Henredon, Pearson, Hickory Chair, Lane Venture,
Maitland-Smith and LaBarge. To learn more about the company, visit
www.furniturebrands.com
About Oaktree
Oaktree is a leader among global investment managers
specializing in alternative investments, with $76.4 billion in
assets under management as of June 30, 2013. The firm emphasizes an
opportunistic, value-oriented and risk-controlled approach to
investments in distressed debt, corporate debt (including high
yield debt and senior loans), control investing, convertible
securities, real estate and listed equities. Headquartered in Los
Angeles, the firm has over 750 employees and offices in 13 cities
worldwide. For additional information, please visit Oaktree's
website at http://www.oaktreecapital.com
Cautionary Statement Regarding Forward-Looking
Statements
Matters discussed in this document and in our public
disclosures, whether written or oral, relating to future events or
our future performance, including any discussion, express or
implied, of our anticipated growth, operating results, future
earnings per share, or plans and objectives, contain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. These statements are often identified by the words
"will," "believe," "positioned, " "estimate," "project," "target,"
"continue," "intend," "expect," "future," "anticipates," and
similar expressions that are not statements of historical fact.
These statements are not guarantees of future performance and
involve certain risks, uncertainties and assumptions that are
difficult to predict. Our actual results and timing of certain
events could differ materially from those anticipated in these
forward-looking statements as a result of certain factors,
including, but not limited to, those set forth under "Risk Factors"
in our Annual Report on Form 10-K for the year ended December 29,
2012, and in our other subsequent public filings with the
Securities and Exchange Commission. Such factors include, but are
not limited to: failure to identify and successfully implement
strategic initiatives; changes in economic conditions; loss of
market share due to competition; changes in our pension funding
obligations; failure to forecast demand or anticipate or respond to
changes in consumer tastes and fashion trends; failure to achieve
projected mix of product sales; business failures of large
customers; distribution realignments; inventory write-downs; sales
distribution and manufacturing realignments; continued operating
losses; loss of or reduction in trade credit; ability to service or
refinance our debt; restrictions in our credit facilities;
increased reliance on offshore sourcing of various products;
fluctuations in the cost, availability and quality of raw
materials; product liability uncertainty; environmental
regulations; future acquisitions or dispositions; possible
delisting of our common stock; loss of key personnel; impairment of
intangible assets; anti-takeover provisions which could result in a
decreased valuation of our common stock; our inability to secure
additional financing to meet our operating and capital needs; our
ability to open and operate new retail stores successfully;
disruptions of our IT systems; failure to maintain and upgrade our
IT systems; and fluctuations in our common stock. It is routine for
internal projections and expectations to change as the year or each
quarter in the year progresses, and therefore it should be clearly
understood that all forward-looking statements and the internal
projections and beliefs upon which we base our expectations
included in this report or other periodic reports are made only as
of the date made and may change. While we may elect to update
forward-looking statements at some point in the future, we do not
undertake any obligation to update any forward-looking statements
whether as a result of new information, future events or
otherwise.
CONTACT: Furniture Brands International, Inc.
1 North Brentwood Blvd.
St. Louis, Missouri 63105
Investor contacts:
Rick Isaak
VP, Controller, Treasurer and Investor Relations
Furniture Brands
314-862-7117
OR
Anton Nicholas/Phil Denning, ICR, 203-682-8200