by PONTOTOC, Miss. — Upholstery manufacturer Southern Motion has filed Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Mississippi.
In its filing, it cited estimated liabilities of between $50 million and $100 million and a similar amount of assets.
It also cited an estimated 200-999 creditors owed money for products and services they have received of late.
Among the top unsecured creditors in the furniture industry are Kuka Trade Co., owed $4.6 million; Leggett & Platt, owed $179,120; Z Wovens, owed $137,337; and Crest Leather, owed $121,5344, to name several.
Monday’s filing also included various motions that would allow the payment of various taxes and utilities along with other financial obligations including employee wages to make sure the company continues to operate without disruption.
The company was purchased by motion upholstery manufacturer Man Wah late last year as part of a strategy to expand its global manufacturing footprint, including North America. Gabriele Natale, managing director of Man Wah USA was not available for immediate comment.
“Southern Motion has experienced financial and operational headwinds, namely a slow retail furniture market and increased manufacturing costs associated with tariffs and the costs of fuel and container rates resulting from various geopolitical events,” said Mary Beth Mayer, Southern Motion senior vice president and chief financial officer in a statement sent to Home News Now. “After careful consideration of a range of alternatives, we firmly believe that the Chapter 11 process represents the best long-term solution for Southern Motion to address our financial position and strengthen our operations. The restructuring plan provides a roadmap for Southern Motion to establish a sustainable capital structure and ensure that the company can continue to operate competitively in the years ahead. “With the support of our key stakeholders, including our valuable employees, vendors, and customers, we will use this process to pursue the best possible outcome on behalf of all of our stakeholders, including our Northeast Mississippi community.”
In its statement, the company said it expects to have sufficient cash from continuing operations and an estimated $5 million in debtor in possession financing to make sure that vendors, suppliers and other business partners will be paid in a timely fashion for all goods and services provided during the reorganization.
It also expects that its current management team will continue to lead the company throughout the reorganization process.
“We appreciate the continued support of our customers, suppliers, and other business partners during this process,” Mayer added. “We value these relationships and look forward to continuing them. We also appreciate the dedication and loyalty of our employees, whose support is, and will always be, critical to the success and to the future of the company.”
ManWah just spent 58.7 million of its money to buy Southern Motion to file bankruptcy 8 months later. This is going to get messy for ManWah