LL Flooring announced Aug. 11 it has initiated a Chapter 11 bankruptcy process and intends to use the proceedings to pursue a going-concern sale of its business.
The company said in a statement it has initiated store-closing sales at 94 of its locations. The rest of the company’s more than 300 stores across the country and its online platform will continue operation with few changes.
LL Flooring is in active negotiations with multiple bidders to sell the business and hopes the bankruptcy court will approve a sale within the next few weeks, the company said.
“After comprehensive efforts to enhance our liquidity position in a challenging macro environment, a determination was made that initiating this Chapter 11 process is the best path forward for the company,” LL Flooring President Charles Tyson said in a statement. “Today’s step is intended to provide LL Flooring with additional time and financial flexibility as we reduce our physical footprint and close certain stores while pursuing a going-concern sale of the rest of our business.”
Bloomberg reported in July LL Flooring was considering a Chapter 11 filing after the flooring retailer struggled to keep up with high interest rates and decreased home renovation activity.
Last month the company said it was considering selling its Sandston, Va., distribution center to improve its cash flow.
LL Flooring’s board appointed AlixPartners Managing Director Deb Rieger-Paganis as its deputy chief restructuring officer. AlixPartners is a financial consultant that advised Bed Bath & Beyond on its bankruptcy.
According to a report from the company, founder and recently elected board member Tom Sullivan and his private equity firm partners, John Jason Delves and Jill Witter, resigned from the board effective immediately. Former CEO Sullivan and his firm partners engaged in a lengthy proxy battle this summer with LL Flooring Holdings to get onto the board.
In May 2023, Sullivan’s firm F9 Investments made a bid to buy the company for $5.76 per share, but LL Flooring’s board rejected it, claiming the bid undervalued the company. Sullivan’s firm made a second bid in November for $3.00 per share. LL Flooring received an additional takeover offer from Live Ventures Incorporated in May to acquire the company at $2.50 a share.
As of the time this article was published, the flooring seller’s stock was trading for $0.84 a share, down from $3.75 this time last year.
