ALEXANDRIA, Va. – A committee of unsecured creditors has
objected to a plan by Florida-based Sun Capital to buy upholstery manufacturer Rowe Furniture for $30 million in cash.
The creditors’ attorneys said the proposed purchase price was well below the $55 million they believe the company would be worth if it were sold in pieces.
The objected was filed in U.S. Bankruptcy Court for the Eastern District of Virginia here earlier in the week.
Creditors said the value of the company’s headquarters in McLean, Va., two manufacturing plants in Salem, Va., and two in Missouri would have a liquidation value of nearly $26 million and that other property, including machinery and equipment, inventory and raw materials, could be worth $29 million in liquidation value.
They also asked that the sale process be slowed to give other prospective bidders time to participate.
Earlier, the Lexington-Rowe affiliate of Sun Capital said it would pay $24 million in cash and assume $6 million in liabilities to buy Rowe’s manufacturing operations. An auction hearing, with Sun Capital the lead bidder, is scheduled in court here for Friday.
Sun Capital said it hopes to close the sale by Jan. 31.
The creditors committee is also objecting to a request for additional bidders to start with a bid of $32.3 million, which would more than cover a $1.05 million fee to Sun Capital if the private equity fund’s bid is bested at auction.
Rowe filed for Chapter 11 bankruptcy protection Sept 18, listing assets of $130.8 million and liabilities of $93.3 million. It has since liquidated its Atlanta-based home furnishings chain, Storehouse.
