Bankrupt Art Van Furniture, LLC, which halted going-out-of-business sales amid the new coronavirus pandemic, reached a tentative agreement with its lender to keep cash flowing and is working to revive a recently scuttled sale of 44 stores.
Art Van has reached an “agreement in principle” with Wells Fargo Bank N.A. for interim cash collateral while the company goes “into stasis or life support mode” for the next four to six weeks, Art Van’s attorney, Gregory W. Werkheiser of Benesch, Friedlander, Coplan & Aronoff LLP, said Thursday.
The company intends to file the agreement with the court by Friday, Werkheiser told Chief Judge Christopher Sontchi of the U.S. Bankruptcy Court for the District of Delaware during a telephonic status conference.
The agreement came two days after the Art Van said its lender had withdrawn financing and a deal with the former owner of Levin Furniture to buy Art Van’s Levin and Wolf-branded furniture stores had collapsed.
The company was forced to shut down all of its stores earlier this month in response to emergency orders from state and federal governments to stop the spread of Covid-19, the disease caused by the virus.
Levin Furniture LLC, the would-be buyer, has reached out to Wells Fargo and is still interested in working out a deal for the 44 stores, where thousands of customers have put down deposits on furniture, said Levin’s attorney, William C. Price of Clark Hill PLC.
Werkheiser said Art Van intends to keep expenses as low as possible until things “start to normalize” and it can resume its going-out-of-business sales.
The case is Art Van Furniture, LLC, Bankr. D. Del., No. 20-10553, Status conference 3/26/20.
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