Walker Edison files for bankruptcy protection

November 2025 | DEALFRONT | BANKRUPTCY & CORPORATE RESTRUCTURING

Financier Worldwide Magazine

November 2025 Issue

Amid mounting financial distress linked to alleged fraud, furniture manufacturer and e-commerce retailer Walker Edison, along with three affiliated entities, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of Delaware.

The filing, made on 28 August 2025, includes Walker Edison Holdco LLC, Walker Edison Intermediate LLC, Walker Edison Furniture Company LLC and EW Furniture LLC. The Utah-based company is seeking to expedite the sale of its operating assets to stalking-horse bidder Twin-Star International, a Florida-based furniture manufacturer, for $20m plus assumed liabilities.

Walker Edison Holdco LLC has listed estimated assets between $10m and $50m, and liabilities ranging from $100m to $500m, owed to between 1000 and 5000 creditors. Major unsecured creditors include Kenco Logistic Services LLC (owed over $3.3m), Fortune Bonus Wooden Limited (over $2.2m) and legal firm Gibson Dunn & Crutcher LLP (over $1.9m).

According to court documents, Walker Edison owes over $214m under a prepetition term loan agreement and more than $10.5m on an asset-based loan facility.

The company’s financial troubles stem largely from a 2021 dividend recapitalisation, in which previous owners secured a $300m term loan. Of that amount, $210m was distributed to shareholders. At the time, Walker Edison was experiencing rising sales costs and declining revenue, yet allegedly misrepresented its financial health to obtain the loan. The resulting financial strain led the former shareholders to relinquish control of the company to its lenders in January 2023.

In recent years, the furniture retail sector has faced significant economic headwinds. A slowdown in the property market, driven by rising interest rates since the pandemic, has dampened consumer spending on home furnishings. Intense competition from major retailers such as IKEA, Ashley Furniture and Ethan Allen, as well as independent outlets, has further pressured smaller firms, leading to store closures and bankruptcy filings.

“Debtor efforts to stabilise their business operations over these last two years have failed,” said Nate Brown, chief financial officer at Walker Edison. “At this point, the only way to save employee jobs and allow the company’s distinctive and high-quality ready-to-assemble furniture lines to continue is to sell the operating assets to Twin-Star International as quickly as possible.”

Founded in 1996, Twin-Star International is a consumer-focused designer and manufacturer of indoor and outdoor living products. It holds numerous product, design and technology patents and leverages data, including its proprietary consumer intelligence platform, to align innovation with market trends.

A lawsuit has been filed against Walker Edison’s former shareholders, including founders Brad Bonham and Matt Davis, and private equity firm Prospect Hill. The suit alleges wrongful distribution, fraudulent transfer, breach of fiduciary duty, aiding and abetting a breach of fiduciary duty, civil conspiracy, unlawful dividend and fraud. Discovery in the Utah lawsuit is scheduled to conclude on 23 October 2025. The plaintiffs are seeking hundreds of millions of dollars in actual and punitive damages.

Walker Edison is also seeking approval for $13m in debtor in possession (DIP) financing, provided by its prepetition lenders. Of this, $6m is allocated to fund ongoing operations, while $7m is earmarked for litigation expenses.

The company operates exclusively through e-commerce channels, selling approximately 90 percent of its products via five platforms: Wayfair, Amazon, Walmart, Target and Home Depot. Its inventory is sourced primarily from suppliers in Asia and Brazil, many of whom are listed among its creditors.

As of mid-September 2025, the Delaware bankruptcy court has approved the DIP financing and authorised the sale process to proceed. An auction is scheduled for late September, with a final hearing set for 29 September 2025. If no higher bids are received, Twin-Star International is expected to acquire Walker Edison’s assets and continue operations under its brand.

Fraser Tennant