Epiq Corporate Restructuring Group was named a winner of the M&A Advisor‘s Consumer Discretionary Deal of The Year award in the more than $100 category. The award honors Epiq Corporate Restructuring Group and its role in the $1.59 billion restructuring of Serta Simmons Bedding.
Epiq was selected as claims, noticing and solicitation agent to help the company execute its prearranged chapter 11 bankruptcy. Serta filed chapter 11 in January to implement a comprehensive financial restructuring that would result in a reduction of the company’s funded debt by approximately $1.59 billion. Accomplished in June, Serta is now positioned to maintain its 19% market share in the bedding industry. Because the company was able to operate as normal during the case, it was able to keep retail and manufacturing facilities open, limit any job loss and today operates with a substantially healthier balance sheet.
“Serta is considered a mega bankruptcy and therefore involves more complexity to administer,” Brad Tuttle, general manager and senior managing director at Epiq, said. “Only experienced claims administrators, like Epiq, can handle these large cases and we are proud that we were selected as their strategic partner.”
Epiq was asked to review and create an executory contract repository for more than 3,000 contracts. Epiq’s experienced case team executed flawlessly and was able to deliver this product in advance of Schedules and Statement of Financial Affairs being filed at the outset of the case. Epiq also assisted Serta with the compilation of the creditor matrix that included more than 40,000 parties consisting mainly of vendors, employees and customers while also launching a custom case website. Epiq expertly handled the bar date and proof of claim notices as well as the confirmation and effective date notices on this high volume of parties.
Epiq set-up a multilingual call center that could field calls from creditors, employees and vendors. Epiq deployed IVR systems that handled many of the incoming calls and provided significant cost saving to the client, while more complex calls were routed to agents. Epiq has its own in-house call center so was able to scale up immediately to meet the company’s demands. Epiq also assisted with the balloting and solicitation process.
The pace of bankruptcies has increased in recent years. According to Epiq Bankruptcy, October commercial chapter 11 filings increased 106% over 2022, including Serta Simmons Bedding. Last month, October marked 15 consecutive months that total, individual and commercial bankruptcy filings have registered monthly year-over-year increases. That type of activity may continue for the rest of the year, according to Tuttle.
“Many in the industry predict that as access to money tightens, we will continue to see an uptick in bankruptcy filings; however, the question is always when and exactly how big the increase will be,” Tuttle said. “Bankruptcies have steadily increased following the sunset of government funding, interest rate increases, inflation growth, and tightening lending standards. These trends are something Epiq studies closely in order to be prepared to support clients like Serta Simmons Bedding.”
