Information for Creditors of Cherry Man Industries, Inc.
Case Number 22-11471 in the United States Bankruptcy Court for the Central District of California
CHERRY MAN WAS FOUNDED IN 2002
According to papers filed in the bankruptcy case, Cherry Man Industries, Inc., also known as Cherryman, is “one of the largest nationwide importers and distributors of office furniture case goods.” The company selects and imports high-end commercial office furniture with a “sophisticated aesthetic” from China and distributes it across the United States. Cherryman also touts its dedication to sustainability as a guiding principle of the company.
Cherry Man is still run by its founder, Frank Lin, who founded the company in 2002. The company has grown from its founding and now has five distribution centers totaling over one million square feet in Fontana, CA, Aurora, IL, Buford, GA, Grand Prairie, TX, and Logan Township, NJ, in addition to its corporate headquarters in El Segundo, CA. The company’s nationwide footprint allows it to quickly and efficiently serve customers in any U.S. state.
Cherryman currently carries four full lines of office furniture products as well as a comprehensive offering of seating options, according to its website. The products offered by Cherryman can outfit any office suite from reception to conference rooms and everything in between.
COMPANY EXECS PLAN TO REORGANIZE
Cherry Man Industries intends to reorganize its business and emerge from bankruptcy. The company plans to continue operating profitably for many years to come. Indeed, according to the bankruptcy filing, the company would not have needed bankruptcy protection if not for the wide-reaching effects of the COVID-19 pandemic.
Like so many other businesses, the coronavirus pandemic negatively affected Cherryman. As a supplier of office furniture, Cherryman relies on offices being heavily used. In normal times, office furniture wears out from use and becomes outdated, necessitating small and large-scale refreshes. When large office spaces are continuously occupied, there is a constant need for the products sold by Cherryman.
When the COVID-19 pandemic shut down large and small offices, orders for Cherry Man’s products slowed to a trickle. That impacted the company’s ability to pay its debts. Without new cash coming in from new orders, Cherry Man had difficulty staying afloat. Although it tried to negotiate with its secured creditors initially, Cherry Man ultimately made the decision to file for bankruptcy in order to effectuate its reorganization through the courts.
WHAT DOES BANKRUPTCY MEAN FOR CREDITORS?
Importantly, Cherry Man plans to reorganize and is confident in its ability to emerge from bankruptcy profitably. It is always good news for creditors when a company in bankruptcy intends to continue operations because that means the company can continue to generate cash to pay creditors. However, creditors are able and encouraged to participate in the bankruptcy process to ensure that the company stays focused on paying all of its debts, rather than favoring only some of its creditors above others.
At this moment, Cherryman has only provided broad strokes regarding its debts. The bankruptcy papers disclose that the company has around $22 million in assets, but that it’s liabilities fall somewhere between $10 and $50 million. More details will come as the bankruptcy progresses but that wide range raises some red flags.
Unsecured creditors should not see a bankruptcy filing as a write-off. Instead, they should take advantage of protections offered by the Bankruptcy Code and organize into a committee of unsecured creditors. A committee advocates for all unsecured creditors and can meaningfully influence a bankruptcy case. If you are an unsecured creditor of Cherryman and you have questions about the bankruptcy or committees generally, please feel free to reach out to PRLT.
PRLT does not represent Cherry Man Industries, Inc. The content on this page is provided for informational purposes only. Nothing on this page or this website creates an attorney/client relationship between you and PRLT. Nothing on this page is legal advice. If you have any questions about the Cherry Man Industries bankruptcy case or anything discussed on this page, please contact us.