Simmons Bedding: court confirms plan, approves disclosure statement

By Lisa Kerner

Charlotte, N.C., Jan. 5 - Simmons Bedding Co.'s plan of reorganization was confirmed and its disclosure statement was approved, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, under the pre-packaged plan of reorganization Simmons and its subsidiaries will continue normal operations throughout the Chapter 11 process, and the company's senior secured bank lenders, trade vendors, suppliers and employees will be paid in full.

Also, each holder of Simmons' senior subordinated notes will be entitled to receive its share of $190 million in cash, and each holder of Simmons' discount notes will be entitled to receive its share of $15 million in cash, which may be invested in the equity of a new indirect holding company for Simmons Bedding by holders of the discount notes.

The pre-packaged plan provides for the acquisition of Simmons Bedding and all of its U.S. and foreign subsidiaries, as well as its parent Bedding Holdco Inc., by affiliates of Ares Management LLC and Teachers' Private Capital, the private investment department of the Ontario Teachers' Pension Plan for total consideration of $758 million.

The company said the plan and related transactions will allow it to substantially reduce its total debt obligations to $450 million from roughly $1 billion, allowing the reorganized company to emerge with a stronger balance sheet and increased financial flexibility.

Simmons, an Atlanta-based mattress manufacturer, filed for bankruptcy on Nov. 16. Its Chapter 11 case number is 09-14037.

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