DD Support Board and Research Team

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"Mattress Firm Bankruptcy Is a Corporate Nightmare"

"(Bloomberg Opinion) -- Just two years after Steinhoff International Holdings NV paid a whopping $3.8 billion to acquire Mattress Firm Inc., its U.S. bedding subsidiary has filed for bankruptcy.

Steinhoff, a South African retailer that is itself struggling for survival after a massive accounting scandal, had already booked more than 1.6 billion euros ($1.9 billion) of impairments in relation to Mattress Firm before Friday’s Chapter 11 filing. Now, Steinhoff will be forced to surrender half of the U.S. store chain’s equity in return for $525 million of financing provided by Steinhoff bondholders. Another goodwill writedown looks likely.

Mattress Firm’s balance sheet, published Friday, shows its liabilities exceeding its assets by $1 billion. The company had run out of options, having burned through about $500 million of cash in three years. A Mattress Firm holding company was on the hook for $3.2 billion of Steinhoff intra-group loans."

https://finance.yahoo.com/news/mattress-firm-bankruptcy-corporate-nightmare-113025486.html