Furniture giant seeks bankruptcy, workers concerned - WBTV 3 News, Weather, Sports, and Traffic for Charlotte, NC

Furniture giant seeks bankruptcy, workers concerned

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LENOIR, NC (WBTV) -

Furniture Brands International, the parent company for the Broyhill, Thomasville, Lane, and Drexel-Heritage brands has filed for chapter 11 bankruptcy.

The company also  indicated in its filings with the court that the investment firm Oaktree Capital Management has agreed to purchase the assets of most of the furniture manufacturing business. The bankruptcy filing comes after the company reported losses of $40 million in the second quarter of 2013.

In Lenoir, more than 1200 people work for the Furniture Brand divisions and local officials are concerned that some might lose their job in the bankruptcy process. New owners of companies tend to trim lbor costs  in their efforts to turn the business around.

"Yes that can happen," said Deborah Murray of the Economic Development Commission, "But it doesn't have to," she said. Murray is optimistic that the company will come out of bankruptcy, and the divisions will continue to operate as they do now under new owners.

Furniture jobs have been increasing in the past year in Caldwell County and the unemployment rate is at 9.9%. For most of the past four years it has been in double digits.

The Broyhill division appears to be the strongest right now, she said. The company has added a hundred workers in the past six months. 

"I hope we're going to be all right," said Randy Stilwell, who has worked in the Broyhill division for 16 years.

Furniture manufacturing has been the lifeblood for the Caldwell County economy for the past century. These days, though, empty factories are scattered across the county landscape. It still is the major employer in the area, said officials but any more closings would be a major blow to that status.

During the bankruptcy proceedings, Oaktree Capital Management has agreed to invest tens of millions of dollars to keep operations at all the plants going. There is no timetable for the bankruptcy proceedings but one official, who did not want to be named, said they believed it would stretch well into next year before everything is resolved.

Chapter 11 bankruptcy could affect benefits such as health insurance and pensions but that will depend on the details of the reorganization plan that is developed.  Local officials say they are optimistic.

"That's a lot of jobs and a lot of wages that our community needs," said Murray.

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