A major US retailer specialising in sleep comforts filed for Chapter 11 bankruptcy protection with the Delaware bankruptcy court on Sunday. The filing was made under the official company name AFM Mattress Co., LLC.
The chain currently operates more than 95 shops across the states of Illinois, Indiana, Michigan, Florida and Missouri. According to the company website, four more new stores in Missouri are also planned. The first court hearing will take place on Tuesday afternoon.
At issue is the chain American Mattress, active since 1988 and later acquired by Frank DeMaio and Mike Kenna. The latter is named in the bankruptcy petition as sole owner and director of AFM Mattress Co.
The filings estimate both total assets and liabilities at between $1 million and $10 million, with a number of creditors between 100 and 199.
© AFM Mattress Co.
What is Chapter 11?
Chapter 11 is a specific form of bankruptcy protection in the United States that allows companies to receive temporary protection from creditors while they restructure their debts and attempt a restart. Unlike a full liquidation (as in Chapter 7), in many cases the company simply remains operational during the process. The aim is to restore the company to financial health and eventually pay creditors (in part).
Large debts at mattress suppliers
Remarkably, five mattress manufacturers appear in the list of the company's largest unsecured creditors. Collectively, they have a claim of over USD 2.06 million. The largest creditor is Adventure Mattress, a young player in the market founded in 2023 by industry insiders Bob Sherman and Barbara Bradford. This company has a claim of more than $1.21 million.
In 2023, the retailer expanded its position by acquiring Michigan-based U.S. Mattress, adding 20 additional shops to its network in one fell swoop.
Source: Furniture Today
