Mattress Firm, Inc. – Files Chapter 11 Petition, Prepackaged Plan

October 5, 2018 – Mattress Firm and 40 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 18-12241. Mattress Firm, which is headquartered in Houston, Texas operates as a specialty retailer of mattresses and related products and accessories in the United States. The Company, is represented by Edmon L. Morton of Young Conaway Stargatt & Taylor. In his declaration supporting the Company’s Chapter 11 petition, Hendré Ackermann, the Company’s COO, states, “The Debtors’ management team and professionals have worked diligently to develop a comprehensive strategy that will allow the Debtors to access sorely needed additional funding and return to profitability. The Debtors intend to exit up to 700 of their retail stores during these Chapter 11 Cases, thereby right-sizing their real estate portfolio in a way that simply would not be feasible outside of bankruptcy, significantly decreasing their occupancy and related costs, and boosting the sales and profitability of their remaining stores. In addition, the Debtors have filed a pre-packaged plan of reorganization (the “Plan”) under which all classes of creditors are unimpaired. The Debtors have also secured commitments for debtor-in-possession financing facilities (the “DIP Credit Facilities”) that will provide the Debtors with a $150 million revolver and a $100 million term loan facility during these Chapter 11 Cases, as well as commitments for $400 million of exit term loan financing that will allow the Debtors to fund all of the payments that are contemplated under the Plan, provide them with sufficient liquidity going forward, and repay the DIP Credit Facilities. The Debtors have also secured a commitment for an asset-based revolving facility in a principal amount of up to $125 million in connection with the effective date of the Plan, which is expected to be initially undrawn and provide additional liquidity going forward.” Mattress Firm’s petition notes between 50,001 and 100,000 creditors (the two largest unsecured creditors being Simmons Manufacturing with a claim of $65.7 million and Serta Mattress with a claim of $25.5 million); estimated assets between $1 billion and $10 billion; and estimated liabilities between $1 billion and $10 billion.