Mattress Maker Corsicana Seeks Court OK on $125 Million Bid

Corsicana Bedding LLC, a bankrupt mattress manufacturer, is seeking court approval for an asset sale auction with Blue Torch Finance’s $125 million offer as the opening bid.

The auction aims to sell “substantially all” of its assets, Dallas-based Corsicana said in an approval request filed Wednesday in the US Bankruptcy Court for the Northern District of Texas. Blue Torch’s stalking horse bid is a credit bid, allowing Corsicana to reduce its debt by $125 million.

Blue Torch also has committed to provide a debtor-in-possession loan to Corsicana.

The new financing proposal and cash from ongoing operations are “expected to enable the mattress company to continue operating as usual,” Corsicana said in a statement when it filed for bankruptcy on June 25.

A hearing on the sale will start on Aug. 24.

In filing Chapter 11, Corsicana, one of the largest mattress manufacturers in the US, cited an ongoing industry slump, higher production costs and a drop in sales. The company, founded in 1971, said those factors had left it unable to pay $145 million in debt, despite efforts to boost sales and reduce costs.

As part of its restructuring, Corsicana sought to reduce product costs and shut down manufacturing facilities in Indiana and Virginia, court documents showed. After an initial focus on lower-cost mattresses that sold for under $1,000, the company recently expanded its inventory to include mattresses “across the cost spectrum.”

Blue Torch didn’t immediately respond to a request for comment.