Furniture Brands to set aside money for utility providers

By Dennis Seid

Daily Journal

TUPELO – Furniture Brands International will be provided utility services for its Lane Furniture division – as well as its other operations – in exchange for setting up escrow accounts for the utility providers.

Furniture Brands filed for Chapter 11 bankruptcy protection last month, and in doing so also filed a motion to prevent utility providers from altering or shutting off services.

Lane owes nearly $600,000 to Tombigbee Electric Power Association, Okolona Electric Department and Lee County. It had filed a separate motion last week asking for the ability to shut off services if Furniture Brands did not set up the deposits or if a mutual agreement couldn’t been reached with the company.

But the U.S. Bankruptcy Court of Delaware, where the motions were filed, granted Furniture Brands’ motion Wednesday.

The beleaguered manufacturer must set up separate deposit accounts, to be held in escrow, with money to cover two weeks’ worth of service from several providers including Tombigbee ($200,000), Okolona ($31,000), Tupelo Water & Light ($2,700) and Lee County ($2,500).

The escrow accounts will be tapped only if the company is delinquent in its payments. The motion also allows the providers to shut off services to Furniture Brands if delinquent bills aren’t paid in a timely fashion.

Lane owes Tombigbee $510,000 under13 accounts, Okolona Electric $63,700 under three accounts, $17,700 to Lee County for water and sewage service and an unspecified amount to TWL.

Click video to hear audio