Serta Simmons Bedding files for bankruptcy protection

ATLANTA, Georgia : In light of its significant debt, the slowing economy and rising interest rates that stifles consumer demand, US mattress-maker Serta Simmons Bedding has filed for bankruptcy protection.

The Georgia-based company, which accounts for about 20 percent of US bedding sales, filed for Chapter 11 protection from creditors in the US Bankruptcy Court in the Southern District of Texas this week.

Under its prepackaged bankruptcy plan, the company has asked for its debt to be reduced to $300 million from $1.9 billion.

It hopes to win court approval for its restructuring by the end of May, and it allocated $125 million in financing to keep operating, including the salaries of its 3,600 employees.

Serta Simmons' brands include Serta, Simmons, Beautyrest and Tuft and Needle, whose sales totaled $2.4 billion in the year ending June 30th, 2022.

The company's Chief Financial Officer, John Linker, said in a court filing that a 2020 restructuring added $200 million of new capital, which helped Serta Simmons cope with higher raw material costs and supply chain disruptions caused by the COVID-19 pandemic.

He said that the company's capital structure was unsustainable because of debt that matured in 2023 and is currently supported by more than three-quarters of its key lenders.

Some lenders, including Angelo Gordon and Co, Apollo Global Management and Gamut Capital Management, have sued the company to change or deny the 2020 restructuring.