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1800mattress.com files for Chapter 11 protection
In U.S. Ba n k r U p tc y co U r t In new yo r k, bedding retailer
1800mattress.com won court approval to convert its
bankruptcy case from an involuntary Chapter 7 proceeding
to voluntary Chapter 11 protection. A week
earlier, on March 17, a group of three creditors had
petitioned the court to force the retailer into involuntary
Chapter 7 bankruptcy for nonpayment of debts.
The creditors included mattress manufacturer Sealy and
Comfort Solutions licensee Blue Bell, as well as a New
York landlord.
The group’s petition was precipitated by an announcement
earlier in the week that the Long Island
City, N.Y.-based multichannel retailer had signed a letter
of intent to sell the company to an investor group led by
mattress industry executive Ken Mazda.
The court granted all six of 1800mattress.com’s
proposed first-day motions. These included approval for
$550,000 of debtor-in-possession financing provided
by rival mattress retailer Sleepy’s, which is seeking to
acquire the company through the Chapter 11 process—
1800mattress.com had reached a tentative deal to sell
the company to Bethpage, N.Y.-based Sleepy’s for $2.1
million.
The financing enables 1800mattress.com to fulfill obligations
associated with operating its business, including
making payments to suppliers and other business
partners for goods delivered and services provided after
the start of the Chapter 11 process.
U.S. puts tariff on Canadian lumber
U
.S. Trade Representative Ron Kirk
has announced a 10% customs
duty on softwood lumber products
imported from the Canadian provinces
of Ontario, Quebec, Manitoba,
and Saskatchewan. The wooden bedframe
components used to manufacture
most mattress foundations in the
United States are made from Canadian
softwood lumber.
The duties come in response
to a ruling by an arbitration panel
convened under the U.S.-Canada
Softwood Lumber Agreement. The
panel ruled that Canada violated the
agreement by miscalculating quotas,
thus limiting the amount of lumber
www.sleepproducts.org/bedtimes
that these provinces could export to
the United States.
The U.S. Trade Representative
rejected Canada’s proposed
corrective action under the order as
insufficient and, in turn, announced
the new tariff.
The sale to Sleepy’s is subject to approval of the
bankruptcy court after completion of competitive bidding
procedures.
Sleepy’s has said in a statement that it would invest
in the growth of the 1800mattress.com brand. But franchise
operators have expressed concerns. One, Consolidated
Mattress and Amalgamated Mattress in Stoughton,
Mass., has voiced strong opposition to the sale.
The bankruptcy proceedings do not immediately
impact Connecticut franchisee Rectangle Corp. in
Windsor, which is “a completely separate company with
a healthy balance sheet, a warehouse full of inventory,
and our own reputation for superior quality, service and
value to our customers,” said President Stephen Perry.
The company has separate contracts with mattress
manufacturers, is current with all payments, and operates
its own fleet of trucks for delivery, its own warehouse
and retail showrooms, and will continue to fulfill
orders placed.
The same can be said for Consolidated Mattress and
Amalgamated Mattress, the franchise operator for parts
of New England, Philadelphia, central and southern
New Jersey and Florida.
The latter is challenging the sale of its franchisor to
long-time rival Sleepy’s and offered debtor-in-possession
financing of its own “without the onerous restrictions
Sleepy’s placed on the funds in its proposal,” the company
said.
Interzum Short
Englander seeks licensees
Englander, a mattress licensing
group based in Olive Branch,
Miss., will be attending Interzum
Cologne to meet with potential
licensees. The company is offering
manufacturing licenses around
the world, particularly in Asia,
Canada and the Middle East.
“Englander has been devoted to
‘better sleep, by design’ for more
than a century,” said Kevin Toman,
Englander president. “We combine
old-world craftsmanship with
state-of-the-art design to provide
the ultimate in sleep comfort.”
BedTimes | May 2009 | 65