Norwalk Furniture rescue not a done deal

NORWALK Little has gone according to plan for Norwalk Furniture since July. Productio
Cory Frolik
May 24, 2010

 

NORWALK

Little has gone according to plan for Norwalk Furniture since July.

Production at its plants shut down, restarted and then shut down again.

The company's $11 million debt problem seemed solved when two private equity firms pledged to buy the company's assets. But then employees' hopes were dashed when the firms pulled out of business talks.

All employees were subsequently laid off and the company dissolved.

But the roller coaster ride wasn't over.

On Monday, Norwalk Furniture chief restructuring officer Jim McTevia announced a group of local buyers emerged. McTevia made it sound as though a sale agreement was on the brink of completion.

Norwalk officials are now saying there is still much to be done and hammered out before any purchase agreement can be inked.

One member of a group of local investors said the group still has a long way to go before signing on the dotted line.

"They asked us to invest, but until we get a firm commitment from everybody, it's not a done deal," the investor said. "Everybody wants to know what's going on, but it just hasn't happened."

Radio, television and newspaper reports have painted the deal as being much closer to completion than it actually is, the investor said. In fact, several news stations have erroneously reported earlier this week that an agreement was reached.

"Everyone seems to think it is (done), but it isn't. Believe me, it isn't," he said. "Maybe if everyone can get together and put their money on the line, it'll be done today but" that is not a guarantee.

Norwalk officials also said media reports have fueled rampant speculation that a purchase agreement and plant reopening will occur sooner than what is realistically possible.

Bethany Dentler, Norwalk's economic development director, said in a prepared statement that "the recent public speculation about the possibility of this purchase has raised community hopes and expectations to unreasonable levels and is distracting the parties from their work to get this accomplished."

But to be fair, the media relied on reports of company insiders who said the deal was viable.

"The company has found a buyer. The buyer has put a deposit down, and the legal paperwork is in the process of being drawn up. The deal could close as early as tomorrow," McTevia told the Register on Monday.

At this point, Dentler said everyone needs to be patient to avoid applying too much pressure on difficult negotiations.

"This will not happen overnight since any restart will likely be done in phases over several weeks," she said. "Obviously, we're all hoping for the best, but we need to give this group the room they need to work out the deal. Getting Norwalk Furniture reopened is a top priority in the community, and we can all help out by letting the negotiations proceed without wild rumors and distracting speculations."

McTevia did not return calls seeking comment Wednesday.