JESSUP, Md.–Classic Sleep Products has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Maryland, in an effort to restructure its ownership.
According to a statement from the mattress manufacturer, it is seeking the approval of the sale of assets which would result in the formation of a new company, to be called Classic Brands LLC. Subject to the court’s approval, the restructuring would increase the majority ownership in the company of the current management team, led by Mike Zippelli, chief executive officer. The funding, which would result in the infusion of $10 million in new financing, would come from JMX Capital Partners, which was formed by partners in Dlandis, Classic’s China-based manufacturing partner; and CIT Financial, Classic’s senior lender. In the Chapter 11 filing, CIT is listed as the largest creditor holding secured claims, at $4.3 million.
In the company statement, Zippelli said the Chapter 11 process was necessary for the company to separate itself from Dormia, its parent company, which filed for bankruptcy 18 months ago. Dormia had operated 30 stores until the filing.
A company spokesman said Classic hopes to complete the restructuring process in 30 to 45 days.