Serta Readies Chapter 11 Filing, Skips Interest Payment on Loan

Serta Simmons Bedding skipped an interest payment on part of its debt this week and is using a grace period to hammer out a deal with lenders that could see it file for bankruptcy in the coming days, according to people with knowledge of the situation.

Groups of the closely held mattress manufacturer’s loan holders are in negotiations over how to divvy up equity in the reorganized company, said the people, who asked not to be identified because the matter is private.

One issue for the groups is the future of a lawsuit tied to a controversial 2020 restructuring deal, ...