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In re Elder-Beerman Stores Corp.

United States Bankruptcy Court for the Southern District of Ohio, Western Division

May 1, 1996, Decided ; May 6, 1996, ENTERED

CASE NO. 95-33643, Chapter 11

Opinion

 [*1013]  DECISION AND ORDER DENYING ANNULMENT OF AUTOMATIC STAY

Dated at Dayton, Ohio, this 1st day of May, 1996.

FINDINGS OF FACT

1. Plaintiff Elder-Beerman ("Elder-Beerman") is a corporation organized under the laws of the State of Ohio. Elder-Beerman is a complex enterprise engaged in the ownership, operation, and management of retail department stores, furniture stores, and related businesses throughout the United States.

2. Defendant Thomasville Furniture Industries, Inc. ("Thomasville") is a corporation organized under the laws of the State of Delaware, with its principal place of business in Thomasville, North Carolina. Thomasville is engaged in the business of manufacturing furniture and related products.

3. Elder-Beerman has purchased and distributed Thomasville products for over 35 years. As early as 1985, the parties entered into a written contract for the sale and distribution of Thomasville furniture  [*1014]  products. That contract contained a provision allowing either party to terminate without cause. Over the years, the relationship [**2]  between Elder-Beerman and Thomasville expanded, and other written agreements were entered into. All of the agreements allow for termination without cause.

4. From the beginning of the relationship between the parties and through the mid-1970s, the Thomasville furniture line was an integral part of the Elder-Beerman furniture operation. Thomasville gave Elder-Beerman instant name recognition in the furniture business, and helped bolster the performance of those departments, as well as the franchise as a whole.

5. Thomasville is well-respected in the furniture industry. Mr. Max Gutmann, CEO of Elder-Beerman, stated that Thomasville is a "fine name" and is an essential line within Elder-Beerman's furniture market. Ron Bultema, Elder-Beerman's Divisional Merchandising Manager, stated that Thomasville is the "foundation" of his business. Thomasville's share of Elder-Beerman's furniture business has been characterized as a "lion's share" (more than 40%).

6. Although Thomasville sales represent less than 1% of Elder-Beerman's total sales revenues, this figure is misleading. Thomasville acts as a promotional leader line for Elder-Beerman. That is, customers are attracted to [**3]  shop at Elder-Beerman because of the Thomasville name. As such, having the Thomasville line in its stores contributes to sales for Elder-Beerman both inside and outside of the furniture line.

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195 B.R. 1012 *; 1996 Bankr. LEXIS 542 **

In re: The Elder-Beerman Stores Corp., et al., Debtors

Disposition:  [**1]  Thomasville's motion for relief from the automatic stay denied.

CORE TERMS

furniture, automatic stay, annulment, products, Gallery, sales, termination, discounts, customer, vendors, reorganization plan, effective, bankruptcy petition, sua sponte, Merchandising, advertising, reorganization, recommended, conditions, courts, orders