Conover, NC-- Hendricks Furniture Group, LLC ("HFG") and sister company Classic Moving and Storage announced Wednesday that, with the support of primary lenders and key manufacturing partners, they will continue their restructuring activities under the protection of Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Western District of North Carolina.
Executives emphasized that they expect business will continue as usual for its Boyles Distinctive Furniture and Naja Rugs units during the restructuring. Making this possible is up to $2.5 Million of Debtor-in-Possession ("DIP") financing secured from Branch Banking & Trust Company ("BB&T") and others as well as support from leading furniture manufacturers which assisted in developing a plan to supply goods to the Company on normal credit and trade terms after the filing.
The support of BB&T and top furniture manufacturers were sought to protect customer orders, deposits and confidence during the transition.
Citing failed Norris Furniture and other non-Boyles retail divisions, and the subsequent obligations resulting from numerous store closings in an extremely distressed commercial real estate market, founder Larry G. Hendricks characterized the filing as a difficult but necessary next step in the restructuring efforts that began in late 2008. The announcement comes after careful deliberation with advisors and industry partners and after pursuing all viable alternatives.
"Although we made progress adapting to recent economic challenges, and had begun implementing a plan to restructure outside of Chapter 11," Hendricks said, "we had to file to do what was right for the creditors, employees and customers associated with our operations."
Despite those real estate liabilities and general weakness of the retail sector, successful lender and manufacturer negotiations prior to today's petition are expected to facilitate a speedy reorganization process. The financial and industry support achieved during these proactive negotiations are intended to enable the companies to meet post-filing obligations in a timely fashion and to provide access to the working capital and flow of goods necessary to service all customers.
"While this filing changes the exact process of our restructuring," Hendricks concluded, "it doesn't change the goal we set almost a year ago: to refocus our company, and in particular our well-respected Boyles brand, on providing exciting products, services and values to loyal customers across the United States."
For more information about today's filing and reorganization efforts click here.
Hendricks Furniture Group told WFMY News 2 this about jobs and the reorganizing move:
HFG employees 245 people in the Carolinas. None of these jobs, including those in the Triad, are expected to be affected by the filing. The goal, in fact, is to protect those jobs and our loyal customers by dealing as decisively as possible with the company's real estate-related debt in Florida (related to non-Boyles stores).
Hendricks Furniture Group is comprised of Boyles Distinctive Furniture, with five retail locations across North and South Carolina, and rug importer and distributor Naja Rugs. HFG and its sister company Classic Moving and Storage, are headquartered in Conover, NC, and serve customers throughout the United States.