Ceramic Industry

Lenox Group to Reorganize Under Chapter 11 (posted 11/26/08)

November 26, 2008

Lenox Group, Inc. recently announced that it has filed a voluntary petition for reorganization relief under Chapter 11 of the U.S. Bankruptcy Code in the Southern District of New York. The company intends to file a variety of first day motions with the court that, with court approval, will allow it to continue to conduct business in the ordinary course without interruption.

In addition, Lenox will seek approval from the court for a new $85 million debtor-in-possession financing facility provided by its current revolving lender group. The new facility will provide a continuing source of funds to the company to enable it to satisfy customary obligations associated with ongoing operations of its business, including the timely payment of employee obligations, material purchases, normal operating expenses and other obligations.

While in Chapter 11, Lenox will continue to pursue a sale of its business through a sale process to be approved by the court in order to attain the highest and best offer from interested parties. As part of these efforts, the company and its lenders under its existing term loan agreement have entered into a Plan Term Sheet and Plan Support Agreement, pursuant to which the term lenders and the company have agreed that substantially all of the company’s assets will be sold to a new entity formed by said term lenders in exchange for cancellation of a portion of their secured loans, subject to higher or better offers. This proposal will be considered as one of the offers in the bidding process that is set up to maximize value of the company’s assets for all creditors.

“We want to assure our employees, customers, vendors and communities that Lenox is conducting business as usual,” said Marc Pfefferle, chief executive officer. “Our Lenox, Dansk, Gorham and Department 56 brands are trusted by consumers and we have strong forward momentum with many new innovative products. While fundamentally sound, our business has been significantly impacted by economic conditions and excessive debt levels incurred at the time Department 56 purchased Lenox, Inc. in 2005.

“After exhausting all other possibilities and considering the current state of credit markets and the economy, we determined that the best way to complete a restructuring of the balance sheet and protect our franchise value was to pursue a sale of the company under court approval in a chapter 11 proceeding. This process will give the company flexibility to operate on a normalized basis, dispose of unproductive assets, reduce operating costs and strengthen its balance sheet. We expect to proceed quickly through this process and emerge with a new owner to support and grow the valuable brands that have provided quality tabletop, giftware and collectible products to consumers for more than a century.”

For additional information, call (267) 525-5095 or visit www.lenoxgroupinc.com.

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