Simmons Files Prepackaged Chapter 11
Posted on November 16, 2009 by
ATLANTA--Having received the go-ahead for its prepackaged plan of reorganization from its lenders, note holders and the U.S. Federal Trade Commission, Simmons today filed for Chapter 11 bankruptcy protection in U.S. bankruptcy court in Wilmington, Del.
As announced in September, the prepackaged plan calls for the acquisition of Simmons by the co-owners of Serta--Ares Management and Teachers' Private Capital, the private-investment department of the Ontario Teachers' Pension Plan. Ares and Teachers' Private Capital would pay $760 million, and Simmons' total debt would be reduced from about $1 billion to about $450 million.
Prior to today's filing, the plan received the "overwhelming approval" of the lenders and note holders--100 percent of the senior lenders, 94.5 percent of the senior subordinated note holders and 98.8 percent of the discount note holders voted to approve the plan, according to a Simmons statement.
The plan also received support from the FTC at the end of October. When the preliminary agreement for Ares and Ontario Teachers to acquire Simmons was announced in September, Simmons said Ares and Teachers' Private Capital would operate Simmons and Serta as separate entities.
Simmons expects to emerge from Chapter 11 in about 60 days. Steve Fendrich, the company's president and chief operating officer, said, "We do not anticipate any changes in our daily operation as a result of this filing. Our manufacturing plants will operate as usual."