The owner of United Furniture Industries, which abruptly fired all of its 2,700 employees during a single night last month, has been quietly assisting a wind down of the business — with some insiders claiming he’s trying to “save face” following the brutal bloodbath, The Post has learned.
David Belford — a wealthy Ohio businessman who had gone silent for several weeks following the Nov. 21 layoffs at furniture factories in Mississippi, North Carolina and California — resurfaced earlier this month telling a local business publication he is “devastated by the turn of events” and called the situation “agonizing.”
But Belford also insisted he’s not to blame, according to the Dec. 12 interview with Columbus Business First. He called himself a “passive investor” in the Okolona, Miss.-based business, according to the report, adding “my insight into the company’s finances was limited.”
“Only very recently did I learn just 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 far too late.”
Nevertheless, sources say Belford has quietly taken an active role in the liquidation, rehiring a handful of employees including the former financial controller, Kim Harper. A former human resources executive, Helen Benefield, has been tapped to help employees recover belongings from shuttered facilities and to reassure them 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 employees. “Who looks like a bigger Scrooge than this guy?”
Belford did not return calls for comment.
UFI’s lenders including Wells Fargo are spearheading the bulk of the shutdown, returning trucks and equipment to vendors and paying for security to protect these assets, sources said. A spokesperson for Wells Fargo declined to comment. UFI suppliers, meanwhile, say they were blindsided by the sudden shutdown and stumped by Belford’s explanation that he was out of the loop.
“I can’t imagine having a company as large as UFI and not know 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 went away when UFI shuttered.
UFI had fallen behind on its payments to North Carolina-based Seagrove this year, but “there was no warning” that it would simply fold, Sechrest said. His brother also owns a lumber company that was forced to shut down and lay off 30 employees.
UFI owes Seagrove $1.2 million in unpaid invoices over the past 90 days, Sechrest claims, and owes his brother’s firm half a million dollars. A small blade-sharpening business that worked with both lumber companies is also on the verge of closing, taking another four jobs with it, he said.
It’s not clear whether UFI will file for bankruptcy. Sources said UFI’s board — whose chairman is still Belford, according to the Ohio Business Journal — has recently retained distressed debt attorney Mark Melickian, a Chicago-based partner at Sugar Felsenthal Grais & Helsinger, who did not respond to requests for comment. UFI also has 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 protection and the bank would love to sell it as a turnkey operation,” said Kenneth Rosen, a distressed debt attorney at Lowenstein Sandler who is not involved in the case.
Suppliers and vendors had been told recently that business was improving and that there was no inkling the company was in the “dire” shape Belford claims. While demand for furniture has slowed as interest rates and inflation rose, 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,” wrote UFI’s longtime president, Larry George, in a Facebook post on Nov. 29. George left the company nearly two years ago and said he would have “stayed on” had he known it would close, adding that he “would have handled this in a completely different manner.”
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 at the North Carolina operations told The Post, adding that as recently as October a senior executive visited the plants she managed and assured her that “things were moving in the right direction.”
Some employees have signed onto lawsuits alleging that UFI violated labor laws by firing them without 60 days notice. UFI sent out texts and emails to employees telling them not to come to work on Nov. 21 because their jobs and health insurance had been eliminated, effective immediately.
A new WARN notice was sent to employees two weeks ago in which UFI disclosed for the first time that it was unable “to obtain sufficient financing to maintain operations” and that the company was “trying very hard” to get this financing.
“It’s sad that he is full of it and takes no blame for any of this,” a former UFI employee said of Belford on a Facebook page for laid-off workers who are exchanging information about health insurance, utility assistance programs and other services.
“That’s bull-s–t,” wrote another ex-employee, responding to Belford’s claims that he was blindsided by a downturn in the business. “David came down within the last 6 months. So he could of gave us more warning. Instead [the] CEO kept telling us business was improving.”
[Written in collaboration with other media outlets with information from the following sources]
