The owner of United Furniture Industries, who abruptly laid off all of his 2,700 employees in a single night last month, quietly helped wind up the company – with some insiders saying he was trying to ” save face” after the bloodbath, The La Poste has learned.
David Belford – a wealthy Ohio businessman who had remained silent for several weeks after the Nov. 21 layoffs at furniture factories in Mississippi, North Carolina and California – resurfaced earlier this month- ci, telling a local trade publication that he was “devastated by the turn of events”. and describing the situation as “agonizing”.
But Belford also insisted he was not to blame, according to the Dec. 12 interview with Columbus Business First. He called himself a “passive investor” in the Okolona, Mississippi-based company, according to the report, adding that “my insight into the company’s finances was limited.”
“It wasn’t until very recently that I learned how dire the situation had become, how limited the company’s options were,” he said. “Unfortunately, the reality of the UFI situation was brought to the Board’s attention much too late.”
Nonetheless, sources say Belford quietly took an active role in the liquidation, rehiring a handful of employees, including former financial controller Kim Harper. A former human resources manager, Helen Benefield, has been asked to help employees recover assets from closed facilities and to reassure them that they will receive W2 statements, sources said.
“He rehired Harper and Benefield and others to save face because he was getting hammered,” said Philip Hearn, an attorney who is suing UFI on behalf of the employees. “Who looks like a bigger Scrooge than this guy?”
Belford did not return calls for comment.
UFI lenders, including Wells Fargo, are leading the bulk of the shutdown, returning trucks and equipment to vendors and paying security to protect those assets, sources said. A Wells Fargo spokesperson declined to comment. UFI suppliers, meanwhile, say they were taken aback by the sudden closure and puzzled by Belford’s explanation that it was irrelevant.
“I can’t imagine having a company as big as UFI and not knowing what’s going on,” said Keith Sechrest, co-owner of Seagrove Lumber LLC, which was forced to lay off its 45 employees after the disappearance of the vast majority of its activities. away when UFI closed its doors.
UFI had fallen behind on its payments to North Carolina-based Seagrove this year, but “there was no warning” it would simply fold, Sechrest said. His brother also owns a lumber business which was forced to close and lay off 30 employees.
UFI owes Seagrove $1.2 million in unpaid bills over the past 90 days, Sechrest claims, and owes his brother’s company half a million dollars. A small blade-sharpening business that worked with the two logging companies is also set to close, taking four other jobs with it, he said.
It is unclear whether UFI will file for bankruptcy. Sources said the UFI board of directors – whose chairman is still Belford, according to the Ohio Business Journal – recently retained the services of distressed debt lawyer Mark Melickian, a partner based in Chicago at Sugar Felsenthal Grais & Helsinger, which did not respond to requests for comment. UFI has also hired employment litigation attorney Michael Kelly, a partner at Squire Patton Boggs in San Francisco, who declined to comment.
“The owner may think it’s too expensive to file for bankruptcy and the bank would like to sell it as a turnkey deal,” said Kenneth Rosen, a struggling attorney at Lowenstein Sandler who is not involved in the case.
Suppliers and vendors had been told recently that business was improving and there was no idea the business was in the ‘catastrophic’ shape Belford claims. While demand for furniture has slowed as interest rates and inflation have risen, UFI has traditionally performed well during recessions because its products are value-driven, a former executive told the Post.
“There is no reason for this company to be in the position it is in,” longtime UFI President Larry George wrote in a Facebook post Nov. 29. George left the business almost two years ago and said he would have ‘stayed on’ if he had known it was going to close, adding that he ‘would have handled it in a completely different way’.
George declined to comment for this story.
“How could someone who owns the majority of the company not know the financial situation,” a former North Carolina operations manager told The Post, adding that last October a senior executive had visited the factories she managed and assured her that “things were going in the right direction.”
Some employees signed lawsuits alleging UFI violated labor laws by firing them without 60 days’ notice. The UFI sent text messages and emails to employees telling them not to come to work on November 21 because their jobs and health insurance had been cut, effective immediately.
A new WARN notice was sent to employees two weeks ago in which UFI revealed for the first time that it was unable “to obtain sufficient funding to maintain its operations” and that the company was “working very hard strong” to obtain this funding.
“It’s sad that he’s full of it and he’s not blamed for all of this,” a former UFI worker said of Belford on a Facebook page for laid-off workers who swap information about health insurance, utility assistance programs and other services.
“This is bull-st,” wrote another ex-employee, responding to Belford’s claims that he had been blindsided by a downturn in the business. “David has fallen in the last 6 months. So he could have given us more warning. Instead [the] The CEO kept telling us that business was improving.