RoomStore, Inc. Announces Refinancing; Company Files Chapter 11 Petition to Facilitate Reorganization Efforts; Business and Operations Continue As Usual

RICHMOND, Va., Dec. 12, 2011 /PRNewswire/ -- RoomStore, Inc. announces a voluntary chapter 11 petition, filed in Richmond, Virginia on December 12, 2011.  RoomStore filed for reorganization as a continuation of efforts to improve its business plan.  RoomStore has also secured a commitment from its current lender, Wells Fargo Bank, for a $14 million Debtor-In-Possession credit facility.  The restructuring process will facilitate RoomStore's financial and operational plans, which are designed to restore the Company to long-term financial health. 

The decision to file for re-organization comes after newly appointed Chief Executive Officer, Stephen Giordano, took the helm on November 14, 2011. A veteran industry leader with over thirty years in the furniture business, Giordano was brought in to execute the reorganization and turnaround of the business. The board of directors also named Steve Gidumal of Virtus Capital, as the company's new Chairman of the Board. The new board consists of Giordano, Gidumal and furniture industry expert Ron Kaplan.

"RoomStore is a viable and recognizable brand that is an established leader in the home furnishings industry. Our dedication to providing our customers with excellent value in home furnishings will provide a strong foundation as we grow and improve during restructuring," says Giordano.

RoomStore has engaged Lowenstein Sandler PC and Kaplan & Frank, PLC as counsel and periodic updates on the reorganization will be made available.

RoomStore currently has 63 stores and will continue to operate its stores in the ordinary course of business while completing its restructuring, and will also retain its interest in Mattress Discounters Group, LLC.

About RoomStore

RoomStore was started in 1992 by several members of the Levitz family in Dallas, Texas.  A leader in the home furnishing industry, it currently operates 63 retail stores in the states of Alabama, Florida, Maryland, North Carolina, Pennsylvania, South Carolina, Texas, and Virginia.  RoomStore is a 65% shareholder in Mattress Discounters Group, LLC ("MDG").  Its MDG segment operates 79 bedding stores in the states of Alabama, Virginia, Maryland, the District of Columbia, and Delaware.  Visit the company at www.roomstore.com for more information. 

Forward-Looking Statements. This press release includes "forward looking statements" as defined by the Securities and Exchange Commission (the "SEC").  Forward-looking statements include all statements that do not relate solely to historical or current facts.  These forward-looking statements are based on the current plans and expectations of our management and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated.  These factors include, but are not limited to: economic conditions affecting the human capital solutions industry; the adverse effect of legislation and other matters affecting the industry; increased competition in the industry; our dependence on certain customers; the risk that we may not be able to retain and attract customers; the availability of and costs associated with potential sources of financing; the loss of key personnel; our inability to attract and retain new qualified personnel; difficulties associated with integrating acquired businesses and customers into our operations; material deviations from expected future workers' compensation claims experience; collectability of accounts receivable; the carrying values of deferred income tax assets and goodwill, which may be affected by future operating results; the availability of capital or letters of credit necessary to meet state-mandated surety deposit requirements; and government regulation.

SOURCE RoomStore, Inc.