LL Flooring initiates Chapter 11 process, pursues sale

LL Flooring announced that the company and certain of its subsidiaries have commenced voluntary Chapter 11 reorganization proceedings in the U.S. Bankruptcy Court for the District of Delaware. LL Flooring intends to use these proceedings to pursue a going-concern sale of its business. LL Flooring is generally operating in the normal course through this process and remains focused on providing customers with a broad range of hard and soft surface flooring. The company has more than 300 continuing stores across the U.S. that, along with its online platform, are open and continuing to serve customers with few changes to store operations and policies. In addition, LL Flooring entered into an agreement with Hilco Merchant Resources to assist the company in its recently initiated store closing sales at 94 of its locations. Those 94 stores will remain open and serving customers through this closing process. Prior to filing for Chapter 11, the company conducted marketing processes with respect to its business and certain of its assets, including its distribution center in Sandston, Virginia. The marketing process garnered significant interest, and the company intends to use these Chapter 11 proceedings to continue pursuing a going-concern sale of its business under the Bankruptcy Code. The company remains in active negotiations with multiple bidders and hopes to seek Bankruptcy Court approval of a sale of its business in the first few weeks of the Chapter 11 proceedings. LL Flooring has received a commitment for debtor-in-possession financing of up to $130M from its existing bank group led by Bank of America. Following court approval, the incremental liquidity provided by the DIP financing, combined with cash generated from the company’s ongoing operations is expected to support the business during these proceedings.