38-year-old mattress chain faces Chapter 7 bankruptcy threat

An economical downturn successful the furnishings retail assemblage has resulted successful large location furnishing companies closing stores and filing for Chapter 11 bankruptcy extortion to reorganize their businesses.

The furnishings manufacture has cited declining sales, arsenic a effect of a multi-year lodging slump, and rising merchandise and labour costs driven by inflation and higher tariffs, for a simplification successful furnishings institution income and profits.

The furnishings industry's mattress subsector has not been immune to economical problems arsenic retailers person needed to record for bankruptcy to restructure their terrible indebtedness obligations.

Bankrupt mattress retail concatenation American Mattress is battling its unsecured creditors, who filed a question successful January to person the retailer's Chapter 11 reorganization to a Chapter 7 liquidation.

The Official Committee of Unsecured Creditors alleged successful their Jan. 28 conversion question that the debtor had not made meaningful advancement toward reorganization, had not filed a reorganization plan, and had operated without credible fiscal projections, a concern program oregon autarkic fiscal oversight.

The U.S. Trustee besides filed a question connected Jan. 30 to either a person the bankruptcy lawsuit to Chapter 7 oregon disregard the case, since the debtor had not paid rent for leased stores, had not paid nonrecreational fees and had recorded $1.26 cardinal successful operating losses since November.

The Elk Grove Village, Ill.-based furnishings chain, which operates 45 locations successful 4 states, including Illinois, Indiana, Michigan, and Florida, however, countered those Chapter 7 conversion filings with an objection successful the U.S. Bankruptcy Court for the District of Delaware connected March 3, 2026, claiming that a purchaser has offered to acquisition its assets and wage each cure costs, Furniture Today reported.

American Mattress said successful its objection that if its lawsuit was converted oregon dismissed, lone the secured lender would apt get paid portion unsecured creditors would person nothing.

A proceeding connected the matters was scheduled for March 5, but nary rulings connected the motions had been posted astatine past check, Furniture Today said.

In its objection, American Mattress said it had cashflow problems since it filed for bankruptcy, which it said it was addressing, and it was processing an exit strategy from bankruptcy. It besides plans to record an plus merchantability motion, the study said.

The debtor's parent, AFM Mattress Company LLC, filed its Chapter 11 petition connected July 6, 2025, listing $1 cardinal to $10 cardinal successful assets and liabilities and seeking to reorganize its concern and restructure debt.