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Furniture Brands International Sale Procedures Approved

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The U.S. Bankruptcy Court approved Furniture Brands International’s motion for the following orders: (i) approving (a) bidding procedures, (b) form and manner of notices, (c) form of asset purchase agreement (including bid protections); (ii) scheduling dates to conduct auction and hearing to consider final approval of sale (including treatment of executory contracts and unexpired leases); (iii) granting related relief and (iv)(a) approving sale of substantially all of acquired assets; (b) authorizing the assumption and assignment of executory contracts and unexpired leases and (c) granting related relief. As previously reported, “Furniture Brands International also announced that in conjunction with the filing, it is pursuing a sale process under Section 363 of the Bankruptcy Code. To this end, the Company has entered into an asset purchase agreement with affiliates of funds managed by Oaktree Capital Management. Under the agreement, Oaktree will acquire substantially all of the assets of Furniture Brands International, except the Company’s Lane business, through a Court-supervised auction process, subject to Court approval and certain other conditions. This bid will serve as a starting point for a sale process, which may include other bidders. In addition, the Company is engaged in a process to evaluate sale alternatives for the Lane business and has already received several indications of interest from potential acquirers. The aggregate purchase price for the acquired assets, as defined in the asset purchase agreement, will be $166 million in the form of the credit bid and cash, plus the assumption of the assumed liabilities. In addition, if Furniture Brands International consummates (i) an alternative transaction or (ii) any Chapter 11 plan (other than a liquidating plan, except one in connection with or as a result of an alternative transaction or one in lieu thereof which accomplishes a comparable result), then the Company will pay to the stalking horse purchaser, in addition to the expense reimbursement, a break-up fee of $6 million. In addition to the bid protections, the bidding procedures require minimum overbid increments in the amount of $1 million.”

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