On July 18, Comerica, the Norwalk's principal banker, demanded the company retire its $11 million revolving debt.

Update 7-25-2008 4:20pm EST: Comerica, Norwalk Furniture's primary banker, today extended its help to resolve debt issues related to the company.

"On behalf of Norwalk Furniture, its employees and their families, we'd like to thank Comerica for its willingness to work through a tough situation on a tight schedule," said Domenic Aversa, acting CEO of Norwalk Furniture. "We are grateful that Comerica understands the importance of helping save these jobs and keeping this 106-year-old company in business."

Aversa said he anticipates a transaction to save the company within a week.

-end update-

In an effort to combat the unexpected shut down of Norwalk Furniture's operations, the State of Ohio's Department of Development has extended a multi-million dollar loan offer that would allow the company to resume operations and pursue its restructuring plan.

On July 18, Comerica, the Norwalk's principal banker, demanded the company retire its $11 million revolving debt. Unable to comply, Norwalk immediately idled more than 840 production and office employees across Ohio, Mississippi, North Carolina and Tennessee.

Although five private equity firms have shown interest in negotiating a purchase of the company, Comerica refuses to negotiate with them. If the bank chooses not to negotiate the debt, the company could be forced to shut down permanently and liquidate its assets, leaving as many as 2,000 workers jobless.

According to Domenic Aversa, acting CEO of Norwalk Furniture, the state's offer is a valuable contribution to a difficult situation.

"If Comerica forces a liquidation of company assets, they will actually yield less money than they would if they accepted one of many investment offers. More importantly, 2,000 workers in four states will suffer," said Aversa.

Norwalk has worked closely with Ohio Governor Ted Strickland and Lt. Governor Lee Fisher on the term sheet that has been submitted to company executives. The loan is designed to help a prospective buyer purchase the company, and its debt, from Comerica. Once a firm commitment is submitted, it will be up to Comerica to decide the company's fate.

Norwalk Furniture, founded in 1902, makes upholstered furniture under the Norwalk, J. Raymond and Hickory Hill trade names. The company also has a network of retail stores and independently owned franchised furniture stores throughout the United States and Canada.