Mattress Retailer Gallery Corp. Files Chapter 11 Petition in Delaware
On November 1, 2007, California mattress retailer Gallery Corporation filed a petition for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The debtor is a wholly-owned subsidiary of non-debtor Pacific Coast Mattress, Inc.
According to the affidavit that the debtor filed in support of its first-day motions, the debtor owns and operates 52 Mattress Gallery retail stores in Southern California. The debtor attributes the filing, in part, to fallout from record high gas prices, home foreclosures and the subprime lending crisis, which led to a downturn in the Southern California housing market. As a result, according to the debtor, fewer people have been buying and furnishing homes, severely affecting the debtor’s business.
The debtor will propose a sale of all its stock to Ortho Mattress, Inc. According to the debtor's affidavit, Ortho Mattress has made an irrevocable commitment to purchase the stock. The Honorable Kevin Gross is presiding over this case, which has been assigned case number 07-11628.
