United Furniture/Lane proposes to convert filing to Chapter 11 bankruptcy

ABERDEEN, Miss. — Approximately 30 minutes before the U.S. Bankruptcy Court in the Northern District of Mississippi was set to hear Wells Fargo N.A.’s petition for involuntary bankruptcy proceedings and to appoint an interim trustee to oversee the dissolution of United Furniture Industries’ assets, UFI presented a motion to dismiss the petition and to convert the Chapter 7 filing to a Chapter 11 bankruptcy in order to liquidate its assets.

In its filing, attorneys for United stated:

“Despite allegations to the contrary, the Company [United] has management, employees, a chief restructuring officer, an independent director, an outside general counsel, and a host of experienced restructuring professionals, all of whom have been actively working for the past month-plus to preserve the Company’s assets, prevent loss to the estate, and develop a strategy to maximize the Company’s value for all stakeholders, a strategy that includes a chapter 11 filing.”

The filing stated that United has developed and will implement a process to preserve and sell its assets to maximize the recovery for its creditors.

In addition, United noted that it has funding in place in the amount of $10 million to run a sale process for its real estate portfolio, which United said has potentially in excess of $50 million in unencumbered value.

Given the recent filings, the hearing was postponed until Friday, January 13 at 10 a.m. Central time.

More details to follow as Furniture Today digests the court filings.

Editor Sheila Long O’Mara contributed to this story.

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