Keeco carve-out left Simply Interior Homes ‘diminished,’ CRO tells the court

Wilmington, Del. – In Simply Interior Homes‘ first-day bankruptcy filing, the company’s recently appointed chief restructuring officer (CRO) asserted that actions taken to break up the former Keeco company left it underfunded.

Simply Interior Homes was formed in February 2025 after private equity owner Centre Lane Partners used a carve-out to spin off the former Keeco company’s utility bedding division. The business, which rebranded as Live Comfortably, was reportedly generating about $400 million in annual revenues at the time.

As part of the process, Centre Lane divested the legacy Keeco company’s window, fashion bedding and shower curtain business, creating an independent sister company that rebranded as Simply Interior Homes (SIH). There remained some overlap in ownership and SIH relied on Live Comfortably for back-end services. (See more below)

The separation did not leave SIH in a healthy position, according to CRO Adam Zalev.

In his June 8 declaration to the U.S. Bankruptcy Court in the District of Delaware, Zalev outlined the particulars:

• SIH was left with an opening balance sheet that did not square with Centre Lane Partner’s earlier projections – an issue Zalev said the company plans to investigate as part of the bankruptcy case.
• The new business was saddled with “diminished customer and supplier relationships” that were created by the former Keeco company’s ongoing financial problems.
• That legacy included the loss of some major retail programs, “severely” impairing SIH’s revenue base.

As to the bankruptcy itself, Zalev also cited Centre Lane Partners’ refusal to provide additional liquidity and capital as well as the impact of “Reciprocal Tariffs” President Donald Trump imposed in April 2025.

There is also an ongoing dispute over SIH’s services agreement with Live Comfortably – which includes IT services, finance and accounting, payroll and other HR services, operations support, Custom’s bond support, demand and supply planning, sales and marketing support, and management of SIH’s e-commerce platform.

In that matter, Zalev accused Live Comfortably of failing to forward payments from SIH’s customers in a timely manner.

“From January to May 2026, the Debtors’ customers remitted more than 75% of the Debtors’ collections to Live Comfortably’s bank accounts. Such amounts ranged from $300,000 to $1.5 million per week during this period. Most recently, during the week ended May 31, 2026, Live Comfortably received approximately $311,000 in payments from the Debtors’ customers, which were expected to be remitted to the Debtors in a timely manner the following week. As of June 7, 2026, despite repeated requests for payment, Live Comfortably has not remitted the funds to the Debtors,” Zalev stated.

Centre Lane’s legal counsel pushed back on those allegations in court, according to a report from Petition11 – saying that the firm’s actions were being characterized unfairly. “[W]e looking forward to the opportunity to correct the record at the appropriate time.”

See also:

• Top unsecured creditors owed over $21 million in Simply Interior Homes bankruptcy
• Keeco rebrands after strategic divestiture to invest in core utility bedding business