The owner of United Furniture Industries, which last month abruptly laid off all 2,700 employees overnight, is quietly helping the business collapse — with some insiders claiming he is trying to save his face after the blood bath. The post has learned.
David Belford — a wealthy Ohio businessman who had been silent for weeks after the Nov. 21 layoffs at furniture factories in Mississippi, North Carolina and California — resurfaced earlier this month, telling a local trade publication that he was excited about the change. Events have been destroyed. And called the situation “painful”.
Belford also insisted he was not guilty, according to a Dec. 12 interview with Columbus Business First. He called himself a “passive investor” in the Okolona, Miss.-based business, adding that “my insight into the company’s finances was limited,” according to the report.
“It was only recently that I realized how dire the situation had become, how limited the company’s options were,” he said. Unfortunately, the reality of UFI’s condition came to the notice of the board too late.
Still, sources say Belford has quietly taken an active role in the liquidation, rehiring a handful of employees, including former financial controller Kim Harper. Sources said a former human resources manager, Helen Benfield, was tapped to help employees retrieve items from the shuttered facility and ensure they received W2 statements.
“He rehired Harper and Benfield and others to save face because he was getting hit,” said Philip Hearn, an attorney who is suing UFI on behalf of the employees. “Who Scrooge looks older than this guy?”
Belford did not return calls for comment.
UFI lenders, including Wells Fargo, are leading the bulk of the shutdown, returning trucks and equipment to dealers and paying security fees to protect those assets, sources said. A Wells Fargo spokeswoman declined to comment. UFI’s suppliers, meanwhile, say they are left reeling by the sudden shutdown and confused by Belford’s explanation that he is out of the loop.
“I can’t imagine owning a company the size of UFI and not knowing what to do,” said Keith Sechrest, co-owner of Seagrove Lumber LLC, who had to lay off 45 employees after the vast majority of his business was lost. It’s news.” When UFI closed, it went away.
Sechrest said UFI fell behind on its payments to North Carolina-based Seagrove this year, but there was “no warning” that it would simply fold. His brother also owns a lumber company that was forced to close and lay off 30 employees.
Sechrest claims UFI owes Seagro $1.2 million in unpaid invoices over the past 90 days and owes its sister company half a million dollars. A small blade business that worked with both lumber companies is also on the verge of closing, taking four other jobs with it, he said.
It is unclear whether UFI will file for bankruptcy. Sources said UFI’s board — still Belford, according to the Ohio Business Journal — recently retained distressed debt attorney Mark Melikian, a Chicago-based partner at Sugar Felsenthal Grais & Helsinger, who did not respond to requests for comment. UFI has also 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 like 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 were recently told that business was improving and there was no suggestion that the company was in the “serious” shape Belford claimed. A former executive told The Post that while demand for furniture has fallen with rising interest rates and inflation, UFI has traditionally done well during recessions because its products are value-oriented.
“There is no reason this company should be in the position it is in,” UFI’s longtime chairman Larry George wrote in a Nov. 29 Facebook post. Had he known it would have been closed, he added, he “would have handled it in a completely different way.”
George declined to comment for this story.
“How could someone who owns a majority of the company not know about the financial situation,” a former director of the North Carolina operation told The Post. “Everything was going in the right direction.”
Some employees have signed complaints alleging UFI violated labor laws by firing them without 60 days’ notice. UFI sent texts and emails to employees telling them not to come to work on Nov. 21 because their jobs and health insurance were being 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 funds to maintain operations” and that the company is “extremely struggling” to obtain those funds.
“It’s unfortunate that he’s full of it and He accepts no blame for any of this.”
Another former employee wrote in response to Belford’s claims that he was blindsided by the business downturn: “It’s not very good. “David fell in the last 6 months. So he can give us more warning. Rather [the] “The CEO kept telling us that business was improving.”