Corsicana Mattress Co. and certain of its affiliated entities filed for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code in the Northern District of Texas in Fort Worth in late June. Corsicana also filed a proposed asset purchase agreement with an affiliate of Blue Torch Finance LLC to acquire the company’s assets through a court-supervised auction and sale process under section 363 of the Bankruptcy Code. The transaction is subject to court approval.
In connection with the proposed sale, Corsicana has received a commitment for debtor-in-possession financing from Blue Torch. On court approval, the new financing, together with cash generated from the company’s ongoing operations, is expected to enable the mattress company to continue operating as usual, according to a news release.
“The Chapter 11 process enables Corsicana to accelerate its re-focus on core customers, renegotiate agreements, flatten our organization and drive greater efficiency in all aspects of our operations,” said Eric Rhea, chief executive officer. “Our core commitment is to serve our valued customers seamlessly, maintain partnerships with key suppliers and operate with integrity. As a result, we will deliver high-quality sleep products coast-to-coast to everyday Americans, handcrafted in the USA for the best possible price — ensuring the Corsicana business will be strong for another 50 years.”
The U.S. Bankruptcy Court for the Northern District of Texas granted all of Corsicana’s first-day motions and certain of its affiliates that provide up to $58 million through two debtor-in-possession financing facilities to support ongoing operations.
The motions granted also included authorization to: cover payroll, benefits and expenses for the company’s full- and part-time employees; continue use existing bank accounts; maintain the company’s insurance programs; pay outstanding taxes; ensure no disruption from utility providers and continue customer programs. The court’s approval of these motions enables the company to continue to serve customers, provide for its employees, and pay vendors and suppliers for services provided and goods received during the Chapter 11 process.
The DIP Facilities provide Corsicana with up to $18 million in term loans from Blue Torch Finance LLC, which is seeking to acquire Corsicana through the Chapter 11 process, and up to $40 million in revolving loans from Wingspire Capital LLC.
The Chapter 11 announcement comes on the heels of Corsicana closing two plants: In May, the company announced it will shutter its mattress-in-a-box facility in Pinola, Indiana. After operating in a temporary facility since 2020, Corsicana opened the new 165,000-square-foot factory in March, projecting it would hire 350 employees and make 1,500 beds per day.
In June, Corsicana announced it would close its Symbol mattress production facility in Richmond, Virginia, impacting 54 employees. Production will be absorbed into the company’s Newington, Connecticut, and Greensboro, North Carolina, facilities.
