NEW YORK (Reuters) – The company that makes Spring Air mattresses and bedding products has filed for bankruptcy protection after selling its key assets and brand name to a former executive, according to court papers.
The company, called Consolidated Bedding Inc, has sold much of its assets, including its brand name and intellectual property, to E&E Bedding Co, according to court papers. E&E Bedding is run by former Spring Air executive Edward Bates, according to state incorporation records.
Consolidated’s remaining corporate assets and 19 affiliates have ceased business operations and filed for Chapter 7 bankruptcy protection from creditors in Delaware last week.
Spring Air said in court documents it had been running at an operational loss for at least a year, and closed several facilities and laid off staff in attempts to reorganize itself.
An earlier offer by private equity firm The Riverside Co to buy the company for approximately $8 million had fallen apart, the company said in court documents.
In Chapter 7 bankruptcy, a trustee is typically appointed to oversee the liquidation of the company’s assets.
The company, which was founded more than 80 years ago and also sold Nature’s Rest branded mattresses, competed with mattress makers like Sealy Corp (ZZ.N), Serta, Simmons Bedding [SIMMB.UL] and Tempur Pedic International (TPX.N).
Mattress makers and sellers have been under pressure this year as consumers cut back on big-ticket purchases amid the recession. Mattress retailers 1-800-Mattress and Mattress Discounters Corp, and manufacturer Foamex International Inc have sought bankruptcy protection in the past year.
The case is In re: Consolidated Bedding Inc, U.S. Bankruptcy Court, District of Delaware, No. 09-11875. (Editing by Steve Orlofsky)