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February 2000—
The Imperial Home Decor Group Inc. (IHDG), Cleveland, OH, and its U.S. affiliates have filed voluntary petitions for protection under Chapter 11 of the U.S. Bankruptcy Code. The petitions were filed January 5, 2000, in the U.S. Bankruptcy Court for the District of Delaware.
The company says it elected to seek court protection to develop and implement a financial reorganization. During the process, the Imperial Home Decor Group and all company units will continue to operate normally, it says.
"With more than 40 percent of the North American residential wall coverings market, IHDG is the industry leader and is a viable company with solid future prospects," said Scott R. Levin, chief financial officer and acting CEO. "Our company is profitable on an operating basis before restructuring and integration costs, but company debt levels are too high and simply cannot be sustained," he said.
When IHDG was formed in March 1998 (See D&WC, May 1998, page 12.), it took on debt levels that assumed continued sales volume in Russia and Eastern Europe, Levin explained. "Those sales were not realized due to the dramatic and unexpected economic downturn that occurred," he said. In addition, sales in North America and local markets in the United Kingdom were lower than anticipated in 1998 and 1999, Levin added.
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