Bush Industries to file for bankruptcy reorganization as part of lock-up agreement

By Sara Rosenberg

New York, March 30 - Bush Industries Inc. plans to file for Chapter 11 protection on or about Wednesday in the U.S. Bankruptcy Court for the Western District of New York as part of a lock-up agreement that was reached with holders of more than 85% of its outstanding bank debt, according to a company news release.

Under the proposed plan of reorganization, the company's approximately $160 million of senior debt will be restructured with about $70 million refinanced by an exit financing facility through 2006 and the rest converted into 100% of the equity of the reorganized company.

The bank lenders that are involved in the lock-up agreement will provide Bush with debtor-in-possession financing and the exit financing facility.

The decision to file for Chapter 11 was based on the company's inability to get alternative sources of financing, obtain an extension of a temporary waiver of non-compliance with some covenants under its credit agreement that is set to expire on Thursday and reach an agreement to extend the loan past the June 30 maturity date.

None of the Bush's subsidiaries are expected to be included in the filing.

Effective Monday, Paul Bush resigned as chairman, chief executive officer and director of the company. Michael Buenzow, currently a senior managing director at FTI Consulting who has been working with the company on the restructuring, has been elected by the board of directors to serve as interim CEO during the Chapter 11 process.

"This restructuring, once fully implemented, will allow Bush to take full advantage of the fundamental strength of our core business operations. It will provide us a much-improved balance sheet and capital structure that is more appropriate for the current economic and market conditions. It is advantageous that we were able to achieve a consensual plan of reorganization," said Bush, in the release.

Bush Industries is a Jamestown, N.Y., manufacturer of ready-to-assemble furniture, casegoods furniture and a supplier of surface technologies.

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