Mattress Firm Wins Court Approval of Chapter 11 Plan
November 16 2018 - 1:09PM
Dow Jones News
By Becky Yerak
Mattress Firm Inc. said it expects to emerge from bankruptcy
protection in the coming days with a smaller footprint and a
stronger balance sheet.
Judge Christopher Sontchi signed off on the company's chapter 11
plan at a hearing Friday in U.S. Bankruptcy Court in Wilmington,
Del. The plan gives a large stake in Mattress Firm to bondholders
but calls for existing owner Steinhoff International Holdings NV to
retain control.
The nation's largest mattress seller, which f iled for
bankruptcy protection last month, spent much of its case working
with its landlords to restructure its leases.
The company is closing about 700 stores as part of its
bankruptcy and company lawyers said Friday that it has amended
leases on more than 1,000 other locations. Another 500 additional
stores "remain subject to negotiation."
Mattress Firm expects to operate 2,600 stores upon emerging from
chapter 11.
The bankruptcy-exit plan had triggered about 53 objections, many
from landlords. All were resolved, the company said, with the last
one occurring "literally on the courthouse steps."
Mattress Firm, which has annual revenue of $3.2 billion, has
said suppliers and contractors will be paid in full.
The Houston-based retailer had acquired dozens of rivals over
the past decade, leading to a glut of stores.
The bankruptcy filing follows a deal that Mattress Firm's
troubled parent company, Steinhoff International Holdings NV,
struck with its bondholders to hand them a 49% stake in the
retailer. Steinhoff took Mattress Firm private two years ago for
$3.8 billion.
Steinhoff will retain control of the rest of the shares.
Mattress Firm entered chapter 11 with total debt of about $3.6
billion, and is emerging with $525 million of exit financing, a
spokeswoman said.
The bankruptcy of Mattress Firm and dozens of related entities
highlighted a misstep for the bedding retailer and Steinhoff, which
has been called "Africa's IKEA." Steinhoff, whose purchase of
Mattress Firm marked its entry into the U.S. market, has been
caught up in an accounting scandal that erupted in December. Its
creditors, who hold billions of dollars of the company's bonds,
agreed to suspend all payments on its debt for three years.
Write to Becky Yerak at becky.yerak@wsj.com
(END) Dow Jones Newswires
November 16, 2018 12:54 ET (17:54 GMT)
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