🥱New Chapter 11 Bankruptcy Filing - Corsicana Bedding LLC🥱

On June 25, 2022, Dallas-based Corsicana Bedding LLC and 11 affiliates (together, the “debtors”) filed chapter 11 bankruptcy cases in the Northern District of Texas (Judge Morris).

Founded in 1971, privately-owned Corsicana operates ten factories across the country and, well, more interestingly, teamed up with a sleep franchising company to break the Guinness World Record for the tallest stack of mattresses in 2021, lol! We mean, how could you NOT want to own this company? Apparently pre-petition term lender and proposed DIP term lender (SOFR+9%), Blue Torch Finance LLC, feels similarly (😜): it has agreed to be a stalking horse purchaser in a proposed 363 sale of the business. Wingspire Capital LLC, as the debtors’ pre-petition ABL lender and proposed DIP revolver lender (BR+3.75%), has consented to the use of its cash collateral to support the process.

How did we get here? Per the debtors:

The Debtors’ financial performance has been negatively by an ongoing slump in the mattress industry, reduced consumer spending, and increased production costs.

Having over $145mm of funded debt doesn’t help either (~$18.5mm ABL + $129.4mm TL). The debtors have $45mm of unsecured debt behind that.

About that DIP. The debtors are proposing $58mm in DIP proceeds split between a $40mm DIP revolver and up to $18mm in DIP term loans. Among other things, the DIP revolver will be used to repay the pre-petition ABL and the DIP term loan will be used to repay $3mm in advances made by Blue Torch pre-petition. Per the two DIP facilities, it looks like the outside date for consummating the case is October 23, 2022.

The debtors are represented by Haynes and Boone LLP (Stephen Pezanosky, Ian Peck, David Staab) as legal, CR3 Partners LLC (Mike Juniper) as financial advisor and CRO, and Houlihan Lokey Inc. ($HLI) as investment banker.

---

Date: June 25, 2022

Jurisdiction: N.D. of Texas (Judge Morris)

Capital Structure: $18.5mm ABL (Wingspire Capital), $129.4mm TL (Blue Torch)

Company Professionals:

• Legal: Haynes and Boone LLP (Stephen Pezanosky, Ian Peck, David Staab, Eli Columbus, Martha Wyrick)

• Board of Directors: Bradley Dietz, Matthew Kahn, Eric Rhea, Scott Vogel

• Financial Advisor/CRO: CR3 Partners LLC (Mike Juniper)

• Investment Banker: Houlihan Lokey Inc.

• Claims Agent: Donlin Recano (Click here for free docket access)

Other Parties in Interest:

• TL DIP Agent & Stalking Horse Purchaser: Blue Torch Finance LLC

  • Legal: Schulte Roth & Zabel LLC (Adam Harris, Abbey Walsh) and Munsch Hardt Kopf & Harr PC

• DIP Revolver Agent: Wingspire Capital LLC

  • Legal: McGuireWoods LLP (Brian Swett, Shawn Fox, Demetra Liggins)

• Official Committee of Unsecured Creditors: Axle Logistics LLC, FedEx Corporate Services Inc., Iskeceli Celik Yay Tel Yan Urunleri A.S., JB Hunt, KKGF LLC d/b/a UT&C, TWE Nonwovens US Inc., Yilmar Dis Ticaret Ltd. Sirketi

  • Legal: Pachulski Stang Ziehl & Jones LLP (Michael Warner, Benjamin Wallen, Robert Feinstein, Bradford Sandler)

  • Financial Advisor: Alvarez & Marsal LLC (Mark Greenberg)

Docket #19