Friday, Feb. 15, 2002 | 11:06 a.m.
Las Vegas-based Nations Flooring Inc. and its subsidiary Carpet Barn, which each filed for Chapter 11 bankruptcy protection in New York in December, said they are seeking court approval to sell Carpet Barn's Las Vegas operations to NF Acquisition Corp. for $4.8 million.
NF Acquisition, an investment company headed by Nations Chairman and Chief Executive Facundo Bacardi, is acquiring Carpet Barn's corporate office, three retail stores, one factory outlet center, one distribution center and several design centers under the supervision of U.S. Bankruptcy Court in New York.
The Las Vegas floor coverings provider, in a notice Thursday, said the sale, scheduled to close on Feb. 28, is still open to better or higher offers. But Steve Chesin, Carpet Barn's chief operating officer, said he hasn't received any so far.
"This sale should help us to get out of bankruptcy in just under 90 days, preserve our core operations and protect our customers," Chesin said. "We expect to emerge from bankruptcy in the first week of March. The restructured company will operate under the Carpet Barn brand name."
Over-expansion into unprofitable markets, high debt service expense and a shortage of working capital that resulted in negative cash flows were cited by Nations Flooring officials as causing its bankruptcy.
Chesin said the company's reorganization efforts are completed and has no plans to downsize its Las Vegas operations, which now have 104 employees. He said Nations Flooring's operations in Washington D.C., Mrytle Beach, S.C., Boise, Idaho and St. George, Utah, were closed as of October.
"The company had expanded into non-Las Vegas markets, was unsuccessful and these operations are now closed. The reorganization plan would result in an increased focus on the core Las Vegas market that's always been solid," said Ira Herman, Carpet Barn's attorney. "Bacardi, one of the primary forces behind the acquisition, believes in the company and is therefore reinvesting in it."
He said the sale will help pay off some $3.2 million in outstanding loans to Carpet Barn's largest secured lender, Boston-based FleetBoston Financial Corp., while the remainder will be paid to some 1,000 shareholders and creditors including suppliers, vendors and consumers.
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