A Cambridge bedding company that took on a lot of debt prior to the economic downturn is seeking protection from creditors in order to stay in business.
Natura World Inc. filed a notice of intention with the federal bankruptcy office on Dec. 16 that it plans to make a proposal to creditors within 30 days to pay off some of its debts.
The notice means the company is insolvent but not bankrupt, and is seeking more time to restructure its affairs.
A. Farber & Partners of Toronto has been appointed as trustee in the case.
In the meantime, Natura has reached an agreement with its lender, Callidus Capital of Toronto, to provide $7.8 million in new financing, it said in a news release.
The company, which makes and distributes mattresses, pillows and bedding products, said there will be no disruption to customers, vendors or suppliers during the restructuring process.
Company president Ralph Rossdeutscher said Natura made significant investments three years ago in new products, equipment and technologies just prior to the recession hitting in the U.S., where its largest market is located.
“While we have reduced operating expenses significantly over the past two years and our current run rate is actually profitable, we could not fully right the ship and pay down the debt we amassed several years ago without going through this reorganization process,” he said in the release.
The company, launched in 1994, purchased a Utah-based competitor in 2009 and set up a manufacturing facility in Texas in 2010.
In an interview, Rossdeutscher said the company has trimmed some of its sales force and is attending fewer trade shows. It currently employs 80 at its headquarters on Natura Way in Cambridge and another 80 in Texas.
Almost two years ago. the company employed 120 people in Cambridge.
Rossdeutscher said the company is seeking a 15-day extension on the 30-day protection period because of disruptions caused by the Christmas holidays.
He said he is optimistic Natura will turn things around with the new financing and several large contracts it is bidding on now.
Rossdeutscher said the restructuring proposal was an unpleasant but necessary step. “It sucks but at least we’re still alive and going forward. If we didn’t do that then it would be fully out of our control and we might not be here as we speak.”
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