MFI management were in talks over the weekend
Furniture retailer MFI will continue to trade after a management buy-out saved the firm from further troubles.
Chief executive Gary Favell said on Sunday that a deal to save the company would be completed within 24 hours.
It comes after several days of talks between management and MFI's owner Merchant Equity Partners.
MFI, bought by MEP for £1 in 2006, is facing increased competition and has seen sales decline. Its quarterly rent bill is also due on Monday.
MFI said the deal would protect its employees' jobs and customer orders.
In a statement MFI said the buy-out will be funded through "a substantial cash dowry payment from MEP which will secure deposits paid by customers."
But it added that MEP would not remain a shareholder following the transaction.
MFI, with headquarters in north London, has around 2,500 staff and 192 stores.
Mr Favell said: "I am delighted that we have secured the future of the MFI business through this management buy-out and have the capital to provide continuity and security for our customers, who continue to support MFI as the largest fitted furniture business in the UK."
He said there had been "large amounts of capital injected over the last two years" and added that the business had some of the "strongest brands in the UK furniture market".
"Fundamentally, it is business as usual for MFI, its employees and customers. In fact, sales in recent weeks have been ahead of plan," Mr Favell said.
Over 30 years MFI grew to become the biggest furniture retailer in the UK with a value of £1 billion.
However, by 2005 sales had fallen to £742 million as competitors such as Ikea, B&Q and Homebase challenged its market position.