Sleep Number Files for Bankruptcy, Eyes Merger

Sleep Number, a prominent mattress manufacturer, has initiated Chapter 11 bankruptcy proceedings. This move comes with a pre-arranged agreement to merge with Sleep Country Canada, a company recently taken private by Fairfax Financial. As part of the bankruptcy court's supervision, Sleep Country Canada is set to be the stalking horse bidder in the sale process.

Despite the bankruptcy filing, Sleep Number has assured customers that its stores will remain open and operational during regular business hours. Its online sales channel is also accepting new orders. To ensure continued business support, the company expects to obtain up to $260 million in debtor-in-possession financing.

The company has been facing significant financial challenges, including a substantial debt burden and declining financial performance. The Chapter 11 process is intended to facilitate a comprehensive reorganization aimed at keeping the business intact and viable for the future.