O'Sullivan Nears Emergence From Bankruptcy

By Staff On Mar 27 2006 - 8:00am

Ready-to-assemble furniture maker O'Sullivan Industries reported its amended plan of reorganization was confirmed by the U.S. Bankruptcy Court for the Northern District of Georgia. The confirmation is expected to allow O'Sullivan to emerge from bankruptcy by the end of March or early April.

O'Sullivan said it has received a commitment to secure up to $50 million in exit financing. This revolving credit facility, which will be secured by substantially all the assets of the company, will support the implementation of the reorganization plan and provide working capital for on-going operations.

The company had declared bankruptcy in the summer of 2005.

The reorganization plan, which was said to be overwhelmingly supported by creditors, calls for a cash payment for general unsecured creditors and a potential additional settlement for all vendors and utility providers who elected to participate.

It also includes a warrant offering for the senior subordinated note holders and the conversion of senior secured notes into substantially all of the equity of the reorganized company, along with $10 million of new junior secured notes.