American Signature, a home furnishings retailer and the parent company of Value City Furniture and American Signature Furniture, filed voluntary petitions for Chapter 11 relief in the United States Bankruptcy Court for the District of Delaware.
In order to maximize value, the company has commenced a sale process pursuant to Section 363 of the U.S. Bankruptcy Code in the hope of a competitive auction within approximately 45 days to elicit higher value for the benefit of all stakeholders. American Signature expects to enter into a stalking horse asset purchase agreement with American Signature Purchaser under which, subject to court approval, American Signature Purchaser will acquire substantially all of the company’s assets and assume certain related liabilities.
“For nearly 75 years, American Signature has served as a family-owned furniture destination that communities could rely on to provide style, quality, and value,” Rudy Morando, co-chief restructuring officer for American Signature, said. “In the face of the ongoing macroeconomic headwinds that have impacted the entire home furnishing industry, the company has carefully evaluated its options to assess the best path forward in the current operating environment. Through that review, we determined that entering a court-supervised process will provide the best opportunity to maximize value. We deeply appreciate our team members, customers and partners and are determined to serve them throughout this process.”
American Signature has secured approximately $50 million in debtor-in-possession (DIP) financing from Second Avenue Capital Partners (SACP). Subject to court approval, this financing will support certain operations and the company’s efforts to maximize value through the Chapter 11 cases and sale process.
Additionally, American Signature is filing a number of customary motions seeking, among other things, authorization to continue payment of employee wages and benefits, maintain certain customer programs and satisfy post-petition obligations to vendors and partners. The company expects to receive court approval for these requests.
