Mattress
Discounters Corp., the largest U.S. mattress retailer, filed for
bankruptcy and said it would close more than 100 California
stores.
The closely held company, which missed bond payments in July,
said it reached agreements with most of its bondholders on a
reorganization plan and with shareholders for a $6 million credit
line to help fund operations. Sealy Corp., the world’s largest
bedding maker, has agreed to $3 million of concessions under a new
supply agreement. Mattress Discounters is one of Sealy’s biggest
customers.
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Mattress Discounters, with more than 200 stores in nine
states and the District of Columbia, filed for Chapter 11
protection today in U.S. Bankruptcy Court in Greenbelt, Maryland.
The company plans to complete its reorganization by April 1.
“In the face of an uncertain and trying time for most
retailers to maintain profitability, we are delighted to be moving
forward toward a consensual balance sheet restructuring and new
investments from our shareholders,” said Steve Newton, the
company’s chief executive officer, in a statement.
Mattress Discounters said it has asked a federal bankruptcy
judge for approval to sell its stores in San Francisco, San Diego
and Sacramento, California, and to close more than 100 remaining
stores in the state. The Upper Marlboro, Maryland-based company
employs more than 1,000 workers.
“Mattress Discounters’ business in its core markets is very
attractive to prospective buyers,” said Dave McIlquham, Sealy’s
chief executive officer, in a statement. “We expect that Mattress
Discounters will no longer be a Sealy affiliate following the
restructuring.”
Bloomberg News
