LL Flooring files for bankruptcy
LL Flooring Holdings, Inc., formerly known as Lumber Liquidators, has "commenced voluntary Chapter 11 reorganization proceedings in the U.S. Bankruptcy Court for the District of Delaware," according to the company. LL Flooring aims to use the proceedings to pursue a sale of its business.
In addition, LL Flooring entered into an agreement with Hilco Merchant Resources, LLC, to assist the company in its recently initiated store closing sales at 94 of its locations. Those 94 stores will remain open through this closing process, per LL Flooring. (You can view which stores are closing here.)
Per Yahoo: "According to court documents, the company holds $500 million to $1 billion in assets and owes $100 million to $500 million to up to 100,000 creditors."
LL Flooring has received a commitment for debtor-in-possession financing of up to $130 million from its existing bank group led by Bank of America. Following court approval, the incremental liquidity provided by the DIP financing, combined with cash generated from the company’s ongoing operations, is expected to support the business during these proceedings.
Charles Tyson, president and CEO of LL Flooring, said:
“After comprehensive efforts to enhance our liquidity position in a challenging macro environment, a determination was made that initiating this Chapter 11 process is the best path forward for the company. Today’s step is intended to provide LL Flooring with additional time and financial flexibility as we reduce our physical footprint and close certain stores while pursuing a going-concern sale of the rest of our business. As we move through this process, we are committed to continuing to serve our valued customers, and to working seamlessly with our vendors and partners. I am appreciative of our associates for their ongoing hard work in providing the best experience for our customers.”
LL Flooring has filed a number of customary motions in connection with the Chapter 11 proceedings. Once approved by the court, those motions will enable the company to transition its business into Chapter 11, including by, among other things, granting authority to continue payment of wages and maintain healthcare and other benefits as well as certain other relief customary in these circumstances. The company has sought authorization to continue honoring customer commitments subject to certain modifications of store operations or policies relating to its acceptance of customer deposits and gift cards. Any updates to store operations or policies will be posted on the company’s website. LL Flooring intends to pay vendors and suppliers in full under normal terms for goods and services provided on or after the Chapter 11 filing date and has requested court approval to do so.
Additional information about the Company’s Chapter 11 process is available at www.LLFlooringRestructuring.com.
