By Daphne Howland of RetailDive
Summary
After declaring it would liquidate because no buyer could be found, LL Flooring on Friday said it has signed an agreement with private equity firm F9 Investments, its largest shareholder, for a going-concern sale of the business.
The deal is expected to close at the end of the month, subject to approval by the U.S. Bankruptcy Court for the District of Delaware and closing conditions. LL Flooring, formerly known as Lumber Liquidators, filed under Chapter 11 last month with plans to close nearly 100 stores.
Per the agreement, F9 Investments will acquire 219 stores and their inventory, a distribution center in Sandston, Virginia, plus LL Flooring’s intellectual property and other assets. The firm has put up a deposit of $4.1 million in cash, per court documents.
The month before LL Flooring’s bankruptcy filing, F9 published an open letter to LL Flooring’s shareholders, urging them to vote for its slate of board nominees, slamming the board for what F9 executives said were its failures and warning that the board was making “poor and puzzling operational and financial decisions that are jeopardizing the [company’s] future.”
By then it had been a little over a year after LL Flooring’s board rebuffed a takeover proposal from F9 subsidiary Cabinets to Go for $5.76 per share in cash, saying the offer “significantly undervalues LL Flooring,” but noting that the company was “open to engaging further on any opportunity that we believe will deliver appropriate value to all our shareholders.”
LL Flooring previously told the Delaware bankruptcy court that pressure in the home improvement sector took a toll on its business. Vendors began to withhold shipments as the company began to have trouble paying its bills, which made it difficult to continue operating.
Working closely with vendors continues to be in focus as LL Flooring prepares to remain in business after all, according to a statement from CEO Charles Tyson.
“We are pleased to have reached this agreement with F9 Investments for a going-concern sale following significant efforts by our team and advisors to preserve the business and maintain ongoing operations,” he said. “As we move through the court-supervised process toward the approval and completion of this transaction, we remain committed to continuing to serve our valued customers and working closely with our vendors and partners. I continue to be appreciative of the ongoing focus and efforts of our associates to provide the best experience for our customers.”
