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Robert Allen Duralee Group Seeks Chapter 11 Protection and Intends to Sell

Trouble for the Second Largest American Supplier of Decorative Fabrics and Furniture

February 13, 2019

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Lee Silberman, chief executive officer of Décor Holdings Inc, The Robert Allen Duralee Group Inc., and its U.S. subsidiaries.
Lee Silberman, chief executive officer of Décor Holdings Inc, The Robert Allen Duralee Group Inc., and its U.S. subsidiaries.

Robert Allen Duralee Group has filed for Chapter 11 protection of the Bankruptcy Code, according to a February 12 letter signed by Lee Silberman, chief executive officer of Décor Holdings Inc, The Robert Allen Duralee Group Inc., and its U.S. subsidiaries and affiliates.

Chapter 11 frees a company from the threat of creditors’ lawsuits while it reorganizes its finances.

“Our debtor-in-possession financing agreement with our senior lenders, and the court-supervised process we are beginning today, will allow us with sufficient liquidity to continue to operate in an uninterrupted manner,” Silberman wrote.

A court meeting with creditors is scheduled for March 15 in New York.

In Chapter 11 proceedings, the debtor’s reorganization plan must be accepted by a majority of its creditors. Unless the court rules otherwise, the debtor remains in control of the business and its assets.

“Our inability to timely eliminate certain redundant expenses following our merger, and realize other anticipated synergies, along with systemic changes in our industry, [has] created an exceptionally challenging time for our company,” Silberman wrote.

He also wrote about selling: “There are multiple parties who have expressed an interest in a purchasing [of] our company. We have hired a well-regarded investment banking firm to assist in this process and they are aggressively pursuing multiple prospects.”

In the past few weeks, RADG has made a series of staff cuts in Hauppauge, N.Y. and its South Carolina-based operations. About 50 employees were laid off in January.

Kerry Galloway also resigned as president of Robert Allen Duralee Group’s contract division as of Jan. 18, 2019. He had held the position since April 2017. 

“We fully expect to continue to pay our employees, meet our post-bankruptcy obligations to our suppliers and vendors, provide superior service to our customers, and strengthen our position as a leading provider of fabrics and furniture in the home furnishings industry,” Silberman wrote.

He stressed some of the following points.
 
  • The Robert Allen Duralee Group is open for business: “This is a financial restructuring that will allow us to constructively address our debt level and eliminate significant redundant expenses. Our operations and customer shipments will continue in the ordinary course and you should see a better level of service as a result of these actions,” Silberman wrote.
 
  • It expects to meet all business obligations going forward: “We fully expect that the court will quickly approve our proposed substantial debtor-in-possession (DIP) financing with our senior lenders. We fully intend to meet our post-filing obligations in the ordinary course," he wrote.
 
  • Company officials want to move quickly as well as sell: "We believe we are well positioned for a quick Chapter 11 process. Filing for Chapter 11 provides us with an opportunity to reorganize and pursue the sale of our company so that we have a more stable future. There are multiple parties who have expressed an interest in purchasing our company. We have hired a well-regarded investment banking firm to assist in this process and they are aggressively pursuing multiple prospects,” Silberman wrote.

In an interview with F&FI in May 2018, Silberman said that fabric wholesalers must figure out a new way for attracting customers to the interior designer for custom design.

“We are losing out to the retailer,” he said at the time.


 


Angelo Carillo
Zhejiang HuaChen New Material Co., Ltd.
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