Creditor emerges as 90% owner of leather furniture retail group

A Chinese leather furniture manufacturer, Haining Mengnu Group, believes it has benefited from the financial difficulties that one of its most important customers suffered last year.

In July 2010, following the economic downturn, Woodlands, New York-based leather furniture and bed retail group Jennifer Convertibles filed for Chapter 11 protection against bankruptcy, with Mengnu Group as its main creditor.

Because the two companies worked continued to work closely together, Jennifer Convertibles was able to emerge from Chapter 11 at the end of February, with Mengnu owning 90% of the equity, having swapped the debt of more than $16 million for shares in the US company. This gives Mengnu an outlet in the US for its leather furniture, and a big share of the benefits of sales to US consumers.

We are emerging as what we believe to be a stronger organisation that will better satisfy its customers, suppliers and employees, said Rami Abada, president of Jennifer Convertibles. We have worked diligently to maximise recovery for our creditors, while maintaining our focus on our core business of delivering quality home furnishings to our customers. We are excited, as we believe we are poised to provide our customers with some of the best values in the home furnishings industry. We are confident that our superior supply chain will not only provide our customers with great value but also great style and quality.