Judge allows company that left more than 1,000 Mississippi workers without job to file for Chapter 11 bankruptcy
Published 8:45 am Thursday, January 19, 2023
A federal judge has allowed the furniture company that shut down its operations in November and left more than a thousand Mississippi workers without a job file for Chapter 11 bankruptcy.
According to the Daily Journal in Tupelo, U.S. Bankruptcy Court Judge Selene Maddox ruled Wednesday after hearing testimony a week before regarding United/Lane Furniture’s motion to move from Chapter 7 to a Chapter 11 bankruptcy.
United shut down its operations on Nov. 22, just before Thanksgiving, affecting 2,700 workers across three states, including Mississippi facilities in Amory, Belden, Hatley, Nettleton, Okolona, Vardaman, Verona and Wren.
Last month, Wells Fargo and two other creditors pushed for United to file for Chapter 7 bankruptcy, saying the company owed them nearly $100 million. Chapter 7 bankruptcy would require a total liquidation of the company’s assets.
Chapter 11 bankruptcy, on the other hand, gives a company the opportunity to reorganize its debt and try to reemerge as a healthy business. During Chapter 11 the debtor would cut expenses, sell assets and try to renegotiate with creditors under the court’s supervision.