Serta Simmons Bedding has filed for pre-arranged bankruptcy in Houston, Texas, in order to reduce company debt from $1.9 billion to $300 million and settle legal claims.
The bedding manufacturer intends to achieve this by converting old loans into new loans and exchanging other debt for equity.
Meanwhile, the company is running regularly, but it has warned that, while business fundamentals remain robust, there are financial issues as a result of the mattress industry’s general decline.
Serta Simmons has been attempting to correct its capital structure since 2019.
It got a $200 million new money loan as part of a refinancing arrangement in 2020 to weather the beginning of the coronavirus pandemic, but it also faced additional obstacles, including two lawsuits for claimed violations of loan agreements connected to the 2020 transaction.
Some lenders have filed to amend or reverse the 2020 restructuring, including funds run by Angelo Gordon & Co, Apollo Global Management, and Gamut Capital Management.
Serta Simmons filed its own case in Texas bankruptcy court in conjunction with its bankruptcy to resolve the lenders’ allegations and validate the 2020 restructure.
The company, based in Doraville, Georgia, was founded in 2010 by the merger of two sister brands, Serta and Simmons.
