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Heritage Home Group LLC Chapter 11 Petition Filed

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July 29, 2018 – Heritage Home Group (“HHG” or “the Company”) and four affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 18-11736. The Company, which designs, manufactures, sources and retails home furnishings, is represented by Pauline K. Morgan of Young Conaway Stargatt & Taylor. Further engagements include Houlihan Lokey Capital, Inc. as investment banker. In a press release announcing the filing, the Company announced that it had, “identified buyers for the purchase of the Company’s portfolio of iconic furniture brands. RHF Investments Inc (RHF), owner of well-known furniture brands such as Century, Hancock & Moore and Highland House, has signed an agreement to acquire HHG’s Luxury business, which includes the Hickory Chair, Maitland-Smith and Pearson brands and related operations in Hickory, North Carolina, and throughout the United States….In addition, the Company has signed a Letter of Intent and are in final negotiations with a buyer for the acquisition of both its Thomasville & Co and Broyhill business units.” HHG further announced that it had “obtained a commitment from PNC, N.A. to provide a $98 million debtor-in-possession (DIP) financing facility, which will provide up to $18 million additional liquidity to support the Company’s operations during the restructuring and sales process. HHG has twice before been through Chapter 11s, most recently emerging in 2014 when the company was acquired by affiliates of funds managed by Oaktree Capital Management. In documents filed with the Court in respect of the current Chapter 11, the Company noted the impact of these earlier experiences, “From its inception in late 2013, Heritage’s sales have been heavily impacted by the negative effects of the [2014] bankruptcy. Following years of sales declines, many furniture retailers had lost faith in the ability of the Company to produce, deliver, and service its products, and the bankruptcy led many of them to shift their purchases to a variety of competitors or even further utilize their own private label offerings.” The Company’s petition notes between 25,000 and 50,000 creditors; estimated assets between $100 million and $500 million; and estimated liabilities between $100 million and $500 million.

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