The owner of United Furniture Industries, who abruptly laid off all of its 2,700 employees in one night For the past month, he has been quietly watching the business go down, with some insiders saying he is trying to “save face” after the bloodbath, The Post has learned.
David Belford, a healthy Ohio businessman had been silent for several weeks following November 21 layoffs at furniture factories in Mississippi, North Carolina and California, he resurfaced earlier this month, telling a local trade publication that he is “devastated by the turn of events” and calling the situation “dying”.
But Belford also insisted it’s not his fault, according to the Dec. 12 interview with Columbus Business First. He called himself a “passive investor” in the Okolona, Mississippi-based business, according to the report, adding that “my knowledge of the company’s finances was limited.”
“It was only very recently that I learned how dire the situation had become, how limited the company’s options were,” he said. “Unfortunately, the reality of UFI’s circumstances was brought to the board’s attention too late.”
However, sources say Belford has quietly taken an active role in the liquidation, rehiring a handful of employees, including former financial controller Kim Harper. A former human resources executive, Helen Benefield, was brought in to help employees retrieve their belongings from the locked facility and assure them they will receive W2 statements, the sources said.
“He rehired Harper and Benefield and others to save face because he was getting beaten up,” said Philip Hearn, a lawyer 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 spearheading most of the shutdown, returning trucks and equipment to providers and paying for security to protect these assets, the sources said. A Wells Fargo spokesman declined to comment. UFI providers, meanwhile, say they were surprised by the sudden shutdown and puzzled by Belford’s explanation that he was out of the loop.
“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 vast majority of its business closed. away when UFI closed.
UFI had fallen behind on its payments to North Carolina-based Seagrove this year, but there was “no warning” that it would simply pull out, Sechrest said. His brother also owns a logging company that 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 firm half a million dollars. A small knife-sharpening business that worked with both logging companies is also about to close, taking another four jobs, he said.
It is unclear if UFI will file for bankruptcy. The sources said the UFI board, whose chairman Belford remains, according to the Ohio Business Journal, recently retained distressed debt attorney Mark Melickian, a Chicago-based partner at Sugar Felsenthal Grais & Helsinger, who did not respond to inquiries. comment requests. UFI also retained employment trial attorney Michael Kelly, a partner at Squire Patton Boggs in San Francisco, who declined to comment.
“The owner may think it is too expensive to file for bankruptcy protection and the bank would love to sell it as a turnkey operation,” said Kenneth Rosen, a Lowenstein Sandler distressed debt attorney who is not involved in the case.
Suppliers and vendors had recently been told that business was picking up and there was no indication the company was in the “dreadful” shape Belford claims. While furniture demand has slowed as interest rates and inflation rise, UFI has traditionally performed well during recessions because its products are value-oriented, a former executive told The Post.
“There is no reason this company should be in the position it is in,” UFI President Larry George wrote in a statement. Facebook post on November 29. George left the company nearly two years ago, saying he would have “stayed” if he had known it was going out of business, adding that he “would have handled this in a completely different way.”
George declined to comment for this story.
“How could someone who owns a majority of the company not know the financial situation?” a former manager of the North Carolina operations told The Post, adding that in October a top executive visited the plants she managed. and assured him that “things were moving in the right direction.”
Some employees have signed lawsuits alleging that UFI violated labor laws by firing them without 60 days’ notice. UFI sent employees text messages and emails telling them not to come to work on November 21 because their jobs and health insurance had been terminated, effective immediately.
A new WARN notice was sent to employees two weeks ago in which UFI first disclosed that it could not “obtain enough funding to sustain operations” and that the company was “trying very hard” to obtain this funding.
“It’s sad that he’s full of it and doesn’t blame himself for any of this,” a former UFI employee said of Belford on a Facebook page for laid-off workers who exchange information about health insurance, utility assistance programs and others. services.
“That’s bullshit,” another former employee wrote, responding to Belford’s claims that he was surprised by a downturn in business. “David has gone down in the last 6 months. So he could have given us more warnings. However [the] The CEO kept telling us that business was picking up.”