NETTLETON, Miss. (AP) — Nettleton-based furniture manufacturer PeopLoungers, which filed for Chapter 11 bankruptcy protection in May, has fought off an asset sale sought by some creditors.
Craig Geno, an attorney representing PeopLoungers, said Friday that an auction for the company's assets ''is on hold, at least temporarily ... we'll see how we do and see where we are.''
At a recent bankruptcy court hearing in Aberdeen. the Bank of New Albany, which has a lien on PeopLoungers' land, equipment and building in Nettleton, argued for the asset sale. PeopLoungers' legal team and others said it would be in the best interest of all to keep the company operating.
In addition, Capital Business Credit has infused several million dollars into the company to keep it running and said it opposed an asset sale.
''The lender has agreed to support us during this time frame, and we'd like to see how we do on our own without worrying about pressure to sell,'' Geno said. ''Now, if a really good offer comes through, we'll certainly consider it, but we want to continue to operate. And we've got a chief restructuring officer who has a lot of experience.''
Chapter 11, the most common form of bankruptcy, frees a company from the threat of creditors' lawsuits while it organizes its finances. 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.
PeopLoungers has about 425 employees at its Nettleton facility. It also maintains showrooms at the Tupelo Furniture Market and in High Point, N.C.
Motion furniture include items such as recliners, sleepers and items that recline, swivel, and massage.
In its bankruptcy filing, PeopLoungers said it owed its 20 largest unsecured creditors nearly $5.7 million. Sales had dropped from about $94 million in 2003 to about $50 million, according to company officials.