April 29, 2008
By BRENDAN M. CASE / The Dallas Morning News

Carrollton-based Home Interiors & Gifts Inc., a 50-year-old company founded by the late Dallas philanthropist Mary Crowley, filed for Chapter 11 bankruptcy protection Tuesday, vowing to reorganize its business operations and restructure its debt.

The company, a direct marketer of home decorations, is conducting normal business operations and is focused on returning to financial health and profitability, it said in a prepared statement.

As many as 100,000 independent contractors sell the company's candles, figurines, mirrors and other goods in the U.S., Canada, Mexico and Puerto Rico. They sell at Tupperware-style home parties and by other direct means.

Its U.S. sales have been in decline, said Dick Lindenmuth, an outside turnaround expert hired as part of the bankruptcy to be Home Interiors' chief restructuring officer. The company has slashed at least 130 jobs this year, according to company executives.

"The board of directors believes the Chapter 11 process is the most prudent course at this time to enable the company to restructure its debt and align its cost structure with revenues," said Mr. Lindenmuth, adding that the bankruptcy would provide a foundation for success.

The company's affiliates in Mexico and Canada were not part of the bankruptcy filing, nor was a wholly owned subsidiary called Domistyle Inc.

Home Interiors executives declined to say how many people still work for the firm, and Mr. Lindenmuth said he could not rule out future cuts.

He did say Home Interiors will close its Dallas Woodcraft Co. unit, which he said employs more than 100. No one at Dallas Woodcraft could not be reached for comment Tuesday. Among creditors listed in the Home Interiors filing were UPS Inc., with an unsecured claim of more than $2 million, and FedEx Corp., with an unsecured claim of about $1.4 million.

Home Interiors was founded in 1957 by Mary Crowley. She and her son, Don Carter, built it into a successful business over several decades.

Ms. Crowley went on to become a major local philanthropist, funding medical research and contributing to First Baptist Church in Dallas and to social causes.

Mr. Carter was the first owner of the Dallas Mavericks, which started playing in the 1980-81 season.

Mr. Carter sold Home Interiors in 1998 to Dallas buyout firm Hicks, Muse, Tate & Furst Inc., which agreed to pay $920 million for about two-thirds of the stock.

Highland Capital Management LP, a Dallas-based investment management company, assumed control in early 2006 as part of a debt restructuring agreement.

Former chief executive Dick Heath stepped down in February, calling Home Interiors a "viable long-term asset."

"I put my heart and soul in it," he said Tuesday. "We couldn't have given it any more than we gave it."