LL Flooring To Remain In Business Following Acquisition By F9 Investments

A New Lease of Life for LL Flooring

LL Flooring, which had previously announced plans to liquidate due to the lack of a buyer, revealed on Friday that it has entered into an agreement with F9 Investments, its largest shareholder. The agreement is for a going-concern sale of the business.

The transaction is set to be finalized by the end of the month, pending approval from the U.S. Bankruptcy Court for the District of Delaware and the fulfillment of closing conditions. LL Flooring, formerly Lumber Liquidators, filed for Chapter 11 bankruptcy last month and had plans to shut down nearly 100 stores.

Details of the Agreement

Under the terms of the agreement, F9 Investments will take over 219 stores along with their inventory, a distribution center located in Sandston, Virginia, and LL Flooring’s intellectual property and other assets. The firm has made a cash deposit of $4.1 million, as per court documents.

F9 Investments' Previous Involvement With LL Flooring

Prior to LL Flooring’s bankruptcy filing, F9 Investments had published an open letter to the company’s shareholders. The firm encouraged them to vote for its board nominees and criticized the board for its perceived failures. F9 Investments warned that the board was making "poor and puzzling operational and financial decisions that are jeopardizing the company’s future."

This came a little over a year after LL Flooring’s board rejected a takeover proposal from F9 subsidiary Cabinets to Go. The offer was for $5.76 per share in cash. The board claimed the offer "significantly undervalued LL Flooring," but noted that the company was "open to engaging further on any opportunity that we believe will deliver appropriate value to all our shareholders."

LL Flooring's Struggles

LL Flooring had previously informed the Delaware bankruptcy court that pressures in the home improvement sector had negatively impacted its business. As the company started struggling to pay its bills, vendors began withholding shipments, making it challenging to continue operations.

LL Flooring's Future Plans

As LL Flooring prepares to stay in business, CEO Charles Tyson emphasized the importance of continuing to work closely with vendors. "We are pleased to have reached this agreement with F9 Investments for a going-concern sale following significant efforts by our team and advisors to preserve the business and maintain ongoing operations," he said. "As we move through the court-supervised process toward the approval and completion of this transaction, we remain committed to continuing to serve our valued customers and working closely with our vendors and partners."

Bottom Line

LL Flooring's acquisition by F9 Investments is a testament to the resilience of businesses in the face of adversity. This deal could potentially breathe new life into the struggling company, ensuring its continued operation and service to its customers. However, the success of this venture will largely depend on the company's ability to adapt and overcome the challenges that led to its initial bankruptcy. What are your thoughts on this development? Feel free to share this article with your friends and engage in the discussion. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.