Joan Fabrics Corporation

Client Profile
Joan Fabrics Corporation (‘Joan’ or the ‘Company’) is a specialized textile fabric company focused on the residential, commercial and hospitality furniture markets in the United States, Canada and Mexico. The Company manufactures upholstery fabrics in its state-of-the-art plants in North Carolina and Mexico through its Circa, Doblin, Joan Home Fabrics and Mastercraft product lines.
Situation
The Company suffered liquidity constraints and stretched payables terms due to a downturn in the domestic furniture industry and an inability to sufficiently control operating costs. On April 10, 2007, Joan filed for protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code. This filing enabled the Company to receive DIP financing which allowed operations to continue while the sale process was conducted.
Solution
Joan hired SSG to affect a Section 363 sale for its Circa 1801, Contract and non-operating assets. The Section 363 auction process drove value from a stalking horse bid of $13.4 million for the non-operating assets to $29.3 million for substantially all of the Estate’s assets including the operating assets, resulting in a 118.7% increase in value from the stalking horse bid.