Thu 09/09/2021 07:31 AM
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Relevant Documents:
Voluntary Petition
DIP Financing Motion

To view the relevant documents above as well as our First Day team's coverage of all U.S. chapter 11 cases filed since 2012 with over $10 million in liabilities including the ABC Carpet & Home chapter 11 request a trial here: https://reorg.com/trial

A.B.C. Carpet Co. Inc., dba ABC Carpet & Home, a New York City-based luxury furniture retailer, filed for chapter 11 protection on Wednesday night, Sept. 8, in the Bankruptcy Court for the Southern District of New York, along with two affiliates. The company reports $10 million to $50 million in assets and $50 million to $100 million in liabilities. The debtors are represented by Greenberg Traurig as counsel, B. Riley as investment banker and financial advisor and B. Riley Retail Solutions to assist with clearance and consignment sales. Stretto is the claims agent. The case number is 21-11591.

According to the petition, on July 21, Amma421, LLC, which is an affiliate, filed a voluntary chapter 11 petition in the Bankruptcy Court for the Southern District of New York. The affiliate’s chapter 11 case is pending before Judge David S. Jones as case number 21-11333. The petition says that the “Debtors have not, at this time, moved for joint administration of the Debtors’ cases with the Affiliate’s case.”

The debtors say that without near-term funding, they would likely need to cease operating, and “have determined in their business judgment, after exploring various strategic options, that a sale of substantially all of their assets as a going-concern is in the best interests of their creditors and estates.” The debtors are seeking approval of $5.7 million in DIP financing from their senior prepetition lender and stalking horse bidder 888 Capital Partners LLC, which will be credit bidding its prepetition claims, according to the DIP financing motion. The prepetition loan, which is secured by a first lien on all of the debtors’ assets, has an outstanding balance, including “recent prepetition advances” of at least $8.7 million, of which at least $2.7 million consists of a participation interest of one of the debtors’ equityholders, Paulette Cole. The petition authorizes up to $6.12 million in DIP financing from 888 Capital.

The DIP financing is subject to various milestones, including entry of bid procedures order by Oct. 1, bid deadline of Oct. 19, an Oct. 22 auction and sale closing by Oct. 31.

The list of largest unsecured creditors includes as the largest claim a $15.5 million bank debt claim held by Northern Trust, with the remainder consisting largely of trade claims and professional services claims.

A list of A.B.C. Carpet Co.’s equityholders follows:

The debtors say that their “business operations have been severely impacted by the pandemic, including government-mandated store closures, fulfillment issues due to supply chain shortages, production delays, and delays in return to work for nearby commercial office spaces.” The debtors also point to adverse market trends over the past few years.

Reorg First Day will provide a full summary once the first day briefing is complete.
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