Furniture Brands Says Court Okays Enhanced "Stalking Horse" Bid For Its Assets

(RTTNews) - Furniture Brands International (FBNIQ.PK) Thursday entered into an asset purchase agreement with KPS Capital Partners L.P. to acquire substantially all of the company's assets for $280 million, including the company's Lane business.

In addition, Furniture Brands has filed a motion seeking authorization from the U.S. Bankruptcy Court for the District of Delaware the Honorable Judge Christopher Sontchi presiding, to conduct an auction process for the company.

Under Section 363 of the U.S. Bankruptcy Code, KPS Capital would serve as the "stalking horse" bidder in the proposed auction, establishing a minimum value of the company's assets.

The Court entered an interim order under which KPS Capital will replace Oaktree Capital Management L.P. as the DIP lender to ensure its operations will continue uninterrupted and to set a final hearing for October 11, 2013. KPS Capital has committed to fund up to about $190 million as the DIP lender.

In order to maximize the asset price of the company's brands, the acquisition agreement would allow for additional qualified prospective bidders to enter an auction process with KPS Capital, in accordance with procedures established by the Court.

The Court authorized the company to proceed with an auction of the company's assets on or before December 10, 2013, subject to the approved bidding procedures, and set December 5, 2013 as the deadline for any bids.

Based on the current stalking horse bid, shareholders will not receive any distribution or recovery on account of their common stock.