Simply Interior Homes Files Chapter 11 in Delaware

Simply Interior Homes, LLC, a Rock Hill, South Carolina home textiles and home décor supplier that sells fashion bedding, window treatments, bath products and decorative goods to major retailers, filed for chapter 11 protection on June 8, 2026 in the U.S. Bankruptcy Court for the District of Delaware. The case, No. 26-10922 (CTG), is jointly administered with six affiliated debtors and was filed with a debtor-in-possession financing package and a going-concern sale process already in motion. The company says it entered bankruptcy with roughly $293,459 in cash on hand, most of it reserved for employee obligations, and a business that had never recovered from the way it was created.

Simply Interior Homes Files Chapter 11 in Delaware

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A carve-out that started underwater

Simply Interior Homes is barely a year old. According to the first-day declaration of chief restructuring officer Adam Zalev, the company was formed in early 2025 through a carve-out of the "soft goods" divisions of Keeco, LLC, then one of North America's largest home textile suppliers and a portfolio company of private equity sponsor Centre Lane Partners. The carve-out was effected in two steps: a partial strict foreclosure under Article 9 of the Uniform Commercial Code against collateral securing Keeco's defaulted term loan, followed by the closing of a membership interest purchase agreement. Keeco kept the utility bedding business and rebranded as "Live Comfortably." The soft goods operation became Simply Interior Homes, LLC, formerly named Soft Goods Operating, LLC.

The transaction, originally expected to close in late October 2024, closed roughly four months late on February 21, 2025. Zalev's declaration describes an opening balance sheet that diverged sharply from the sponsor's projections. Centre Lane had projected the new company would launch with $5 million of cash and approximately $49 million of finished-goods inventory. Instead, the declaration states, the debtors began with no cash and only about $27 million of inventory, roughly $22 million of which was excess or obsolete, while assumed accounts payable came in around $32 million against a projected $25 million. Management revised its 2025 revenue plan from $185 million down to $86 million.

Centre Lane remains the indirect sole owner of the debtors through a chain of holding entities, as set out in the corporate ownership statement attached to the voluntary petition.

What the business actually is

Despite a rocky launch, the debtors retain a recognizable wholesale platform. The company operates as a business-to-business sourcing partner to department stores, off-price chains, e-commerce retailers and home centers, with roughly 27 employees as of the petition date. Its brand portfolio includes Eclipse, a window-treatment line carried at Walmart, HomeGoods and Amazon; Hookless, a bath brand built around a patented hook-free shower curtain sold at Lowe's and Home Depot; the Historic Charleston bedding collection; and licensed Kate Spade Home bath accessories.

The debtors maintain their headquarters in Rock Hill, a New York showroom shared with Live Comfortably, overseas sourcing offices in China, Pakistan and India, and third-party warehouses in Reno, Nevada and Whitestown, Indiana. That reliance on imported goods runs straight through the company's creditor list: the largest unsecured claims belong to Asian textile manufacturers, led by Sigma Vietnam Industrial Co. at roughly $3.0 million, Nantong Farady Textile at about $2.9 million and Zhenjiang Deli Textile Products at roughly $2.8 million. (court filing)

How the company ran out of room

The declaration attributes the filing to a stack of compounding problems. The debtors inherited Keeco's customer-service failures, with fill rates of just 30% to 40% against the 95% or better that retail partners expect; the company lost material programs, including with Wal-Mart, and although fill rates rebounded above 90% by the fourth quarter of 2025, the lost programs did not return. The company generated approximately $84.7 million in gross revenue and only about $3.4 million in adjusted EBITDA in fiscal 2025, well below plan.

Reciprocal tariffs that took effect on April 15, 2025 further eroded margins. According to Zalev, Centre Lane directed the company not to pass tariff costs to customers in anticipation of an exemption that never came. The sponsor also led multiple recapitalization, M&A and refinancing efforts through 2025 and into 2026, including a planned roll-in acquisition for which Centre Lane formed the SIH Beckham Buyer entities; that transaction could not close for lack of financing, and the declaration states that Centre Lane then declined to provide further liquidity. The debtors say they intend to investigate potential claims arising from these events. (court filing)

Compounding the liquidity squeeze was a dispute over a transition services agreement with Live Comfortably, which still provides most of the debtors' back-office and operational functions and carried trailing annual charges exceeding $2.7 million. The declaration states that from January through May 2026, customers remitted more than 75% of the debtors' collections to Live Comfortably's accounts, ranging from $300,000 to $1.5 million per week, and that as of June 7, 2026 Live Comfortably had not turned over roughly $311,000 collected during the week ended May 31. On April 28, 2026, Live Comfortably issued a breach notice claiming about $5.1 million in unpaid charges and threatened to terminate the agreement. By the petition date, the debtors had gone more than 12 weeks without making material supplier payments, customs and duties were unpaid, and inventory was being held at ports as overseas manufacturers suspended shipments.

Capital structure

As detailed in the first-day declaration, the debtors carry roughly $17.9 million in funded debt under a prepetition revolving credit facility governed by a February 21, 2025 credit and guaranty agreement, with aggregate commitments of $30 million maturing in February 2029. Great Rock Capital Partners Management, LLC serves as administrative agent, with GRC SPV Investments, LLC and Wingspire Capital LLC as lenders; the facility holds a first-priority lien on substantially all assets.

Behind that sit subordinated sponsor notes totaling roughly $70 million. One note in favor of Centre Lane Partners IV, L.P., in the principal amount of $13,827,994.83, carries a second-priority lien; another, held by Centre Lane affiliate 11th Lane Holdings SG, LLC, in the principal amount of $15,047,637.93, is unsecured. Trade and other unsecured claims include approximately $12 million in aged payables owed to vendors the company does not intend to keep using. (court filing)

DIP financing and the sale timeline

To fund the cases, the debtors negotiated a $15 million superpriority debtor-in-possession financing facility with their existing secured parties, after marketing for financing produced no other viable offers. The facility consists of $5 million in new-money revolving commitments plus a roll-up of up to $10 million of prepetition obligations, at a ratio of $3.00 of rolled-up debt for every $1.00 of new money funded. Great Rock Capital serves as DIP agent. The debtors projected roughly $3.3 million of peak funding need between filing and the anticipated sale closing. The court entered an interim DIP and cash collateral order on June 9, 2026.

The centerpiece of the case is a sale of substantially all of the debtors' assets, pursued as a going concern with a parallel orderly liquidation of inventory and working capital. The debtors retained Rock Creek Advisors as sales agent on June 5, 2026 to run the process and reserve the right to designate a stalking-horse bidder. On June 22, 2026, the court entered the bidding procedures and sale order setting the schedule: a bid deadline of July 27, 2026, an auction on July 30, a sale hearing on August 6, and a deadline to consummate the sale by August 21, 2026.

Goodwin Procter LLP is lead restructuring counsel, with Potter Anderson & Corroon LLP serving as Delaware co-counsel and Epiq retained as administrative advisor and claims agent.