Mattress manufacturer and importer Classic Sleep Products, based in Jessup, Md., has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Maryland. It is seeking approval for the sale of company assets to a new entity, Classic Brands LLC. Classic Sleep Products’ long–time Chinese manufacturing partner would have an equity stake in the new company and has pledged $10 million in financing.
Classic Sleep Products said there will be no disruption of service to customers, vendors or suppliers during the Chapter 11 process and the company expects to exit bankruptcy quickly.
Under the proposed reorganization plan, current management will increase its majority ownership stake in the business with funding provided by JMX Capital Partners and a senior lender, CIT Financial.
“We see this move as a very exciting opportunity to solidify Classic’s position as the leading value brand in the United States. This strong infusion of capital will strengthen our current business and position the company for dynamic future growth,” said Mike Zippelli, Classic Sleep Products chief executive officer.
Zippelli said the filing was necessary in order to separate the mattress producer from its retail arm, Dormia Inc., which had operated more than 30 stores until shortly after its Chapter 11 filing 18 months ago.
Classic Sleep Products sells its beds and sleep accessories under the Dormia, Space Age and Natural Expressions brands.