LNT Supplier Hopes Hang by Thread
Brent Felgner -- Home Textiles Today, September 29, 2008
New York —During the New York Home Fashions Market, Linens 'n Things merchants meeting with suppliers exhibited confidence and hope about their company's post-bankruptcy future – even as the climate darkened.
The LNT buying group was enthused about their prospects early in the market week, said Kim Robertson, national marketing manager for Louisville Bedding. They spoke of a smaller but ultimately profitable chain following the company's hoped-for emergence in early 2009.
But in the wake of renewed questions about the reorganization plan and reports that equity fund Cerberus Capital would take a pass on involvement, fears of a potential liquidation are again at the surface. Peter Duda, a spokesman for Cerberus, said the company would not comment on the report first seen in the New York Post. A spokesperson for LNT did not immediately return calls.
“That's all changed now,” Robertson said of the early optimism, adding, “No one wants to see them [disappear].”
“We're still cheering for them,” offered Sy Sadinoff, chairman of Beacon Looms. “We have not seen enough good news coming out of LNT yet to feel comfortable or confident, but we're still shipping them.” He added, “It's not good for anybody to have them disappear.”
Loren Sweet, president of Brentwood Originals, said, “We hope for nothing but the best.”
The LNT reorganization plan is dependent on support of its proposal for a debt-to-equity swap among secured noteholders, and the acceptance of stock warrants by the unsecured creditors. While the plan is pending, the company is also under deadlines to meet DIP financing agreement benchmarks in October and December.
The scenario has been further complicated by widespread crisis in the financial industry. Money will get even tighter and analysts expect even greater aversion to risk.
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