SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            ------------------------

                                    FORM 10-Q

(MARK ONE)

(X)      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the quarterly period ended September 30, 2000

                                       OR

( )      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the transition period from _________ to _________


Commission File Number 33-61534


                          Levitz Furniture Corporation
           ----------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Florida                                               23-1657490
-------------------------------                            ------------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                             Identification No.)

7887 North Federal Highway, Boca Raton, FL                          33487-1613
------------------------------------------                          ----------
(Address of Principal Executive Offices)                            (Zip Code)

                                 (561) 994-6006
              ----------------------------------------------------
              (Registrant's telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes [X]         No [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

On October 31, 2000, there were 1,000 shares of Common Stock, par value $0.40
outstanding.


<PAGE>

THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS FORWARD LOOKING STATEMENTS WITHIN
THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 WITH RESPECT
TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF THE COMPANY,
INCLUDING STATEMENTS UNDER THE CAPTION "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS". THESE FORWARD LOOKING STATEMENTS
INVOLVE CERTAIN RISKS AND UNCERTAINTIES. NO ASSURANCE CAN BE GIVEN THAT ANY OF
SUCH MATTERS WILL BE REALIZED. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD LOOKING STATEMENTS INCLUDE,
AMONG OTHERS, THE FOLLOWING POSSIBILITIES: (1) BANKRUPTCY COURT ACTIONS OR
PROCEEDINGS RELATED TO THE BANKRUPTCY OF LEVITZ AND ITS SUBSIDIARIES; (2)
COMPETITIVE PRESSURE IN LEVITZ'S INDUSTRY; (3) GENERAL ECONOMIC CONDITIONS; (4)
CHANGES IN THE FINANCIAL MARKETS AFFECTING LEVITZ'S FINANCIAL STRUCTURE AND
LEVITZ'S COST OF CAPITAL AND BORROWED MONEY; (5) INVENTORY RISKS DUE TO CHANGES
IN MARKET DEMAND OR LEVITZ'S BUSINESS STRATEGIES; (6) CHANGES IN EFFECTIVE TAX
RATES; AND (7) THE UNCERTAINTIES INHERENT IN LEVITZ'S OPERATIONS. LEVITZ HAS NO
DUTY UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 TO UPDATE THE
FORWARD LOOKING STATEMENTS IN THIS QUARTERLY REPORT ON FORM 10-Q.

                  LEVITZ FURNITURE CORPORATION AND SUBSIDIARIES

                                    FORM 10-Q

                               SEPTEMBER 30, 2000

Table of Contents                                                         Page
-----------------                                                         ----

PART I - FINANCIAL INFORMATION

       Item 1.      Financial Statements

              Consolidated Condensed Balance Sheets......................... 3

              Consolidated Condensed Statements of Operations............... 4

              Consolidated Condensed Statements of Cash Flows............... 5

              Notes to Consolidated Condensed Financial Statements.......... 6

       Item 2.      Management's Discussion and Analysis of Financial
                    Condition and Results of Operations

              Comparison of Operations......................................12

              Liquidity and Capital Resources...............................14

PART II - OTHER INFORMATION

       Item 6.      Exhibits and Reports on Form 8-K........................18

       Signatures   ........................................................19

       Exhibit Index........................................................20

                                       2
<PAGE>

PART I.  FINANCIAL INFORMATION
ITEM 1.  Financial Statements

                  LEVITZ FURNITURE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                             (Dollars in thousands)
                                   (Unaudited)

                                           September 30,    March 31,
                                               2000           2000
                                             ---------      ---------
                  ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                  $   3,774      $   2,891
  Receivables                                   20,673         21,340
  Inventories                                   78,208         80,293
  Deposits and prepaid expenses                  4,769          4,347
                                             ---------      ---------

    Total current assets                       107,424        108,871
                                             ---------      ---------

PROPERTY AND EQUIPMENT, net                     31,525         34,075
                                             ---------      ---------

PROPERTY UNDER CAPITAL LEASES, net              20,408         27,772
                                             ---------      ---------

OTHER ASSETS:
  Intangible leasehold interests                 3,632          5,085
  Property held for disposal                        --          2,250
  Other                                         27,007         21,321
                                             ---------      ---------
                                                30,639         28,656
                                             ---------      ---------
                                             $ 189,996      $ 199,374
                                             =========      =========

   LIABILITIES AND STOCKHOLDER'S DEFICIT

CURRENT LIABILITIES:
  Cash overdrafts                            $  12,391      $  10,210
  Current portion of obligations
    under capital leases                            80            351
  Accounts payable, trade                       30,890         23,558
  Accrued expenses and other liabilities        81,939         84,491
  Payable to parent                             13,607         13,622
  Deferred income taxes                            138             --
  DIP Facility                                  97,150         77,392
                                             ---------      ---------

    Total current liabilities                  236,195        209,624
                                             ---------      ---------

OBLIGATIONS UNDER CAPITAL LEASES,
  net of current portion                        22,739         25,946
                                             ---------      ---------

OTHER NONCURRENT LIABILITIES                    16,073         15,078
                                             ---------      ---------

DEFERRED INCOME TAXES                            6,035          6,173
                                             ---------      ---------

LIABILITIES SUBJECT TO COMPROMISE              293,996        293,708
                                             ---------      ---------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDER'S DEFICIT:
  Common stock, at par value                         1              1
  Capital in excess of par                      58,453         58,453
  Retained earnings (deficit)                 (443,496)      (409,609)
                                             ---------      ---------
    Total stockholder's deficit               (385,042)      (351,155)
                                             ---------      ---------
                                             $ 189,996      $ 199,374
                                             =========      =========

              The accompanying notes are an integral part of these
                        condensed financial statements.

                                       3
<PAGE>
                  LEVITZ FURNITURE CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                    (Dollars in thousands except share data)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                        Three Months Ended       Six Months Ended
                                           September 30,           September 30,
                                         2000        1999        2000        1999
                                       ---------   ---------   ---------   ---------
<S>                                    <C>         <C>         <C>         <C>
Net sales                              $ 126,893   $ 126,331   $ 255,282   $ 246,319
                                       ---------   ---------   ---------   ---------
Costs and expenses:
  Cost of sales                           70,877      72,058     142,680     140,159
  Selling, general and administrative
    expenses                              55,193      55,961     112,318     105,690
  Depreciation and amortization            1,957       2,082       3,911       5,003
  Interest expense, net                    5,708       3,153      10,417      10,376
                                       ---------   ---------   ---------   ---------

                                         133,735     133,254     269,326     261,228
                                       ---------   ---------   ---------   ---------
Loss before reorganization items and
  income taxes                            (6,842)     (6,923)    (14,044)    (14,909)
                                       ---------   ---------   ---------   ---------

Reorganization items:
  Loss on store closings                  15,672       3,050      16,272       3,050
  Professional fees                        1,885       1,538       3,571       2,602
                                       ---------   ---------   ---------   ---------
    Total                                 17,557       4,588      19,843       5,652
                                       ---------   ---------   ---------   ---------

Loss before income taxes                 (24,399)    (11,511)    (33,887)    (20,561)

Income taxes                                  --          --          --          --
                                       ---------   ---------   ---------   ---------

Net loss                               $ (24,399)  $ (11,511)  $ (33,887)  $ (20,561)
                                       =========   =========   =========   =========

Net loss per common share              $ (24,399)  $ (11,511)  $ (33,887)  $ (20,561)
                                       =========   =========   =========   =========

Weighted average number of common
  shares outstanding                       1,000       1,000       1,000       1,000
                                       =========   =========   =========   =========
</TABLE>

              The accompanying notes are an integral part of these
                        condensed financial statements.

                                       4
<PAGE>
                  LEVITZ FURNITURE CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)
                                   (Unaudited)

                                                          Six Months Ended
                                                             September 30,
                                                       ---------------------
                                                         2000        1999
                                                       ---------   ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                             $ (33,887)  $ (20,561)
                                                       ---------   ---------
Adjustments to reconcile net loss to net cash
  used in operating activities:
  Depreciation                                             2,425       2,982
  Amortization                                             1,486       2,021
  Loss/(gain) on disposal of property and equipment           14         (30)
  Pension expense                                           (350)        (29)
  Reorganization items, non-cash                          10,405         465

  Changes in operating assets and liabilities:
    Decrease (increase) in:
      Receivables                                          1,025       1,177
      Inventories                                         (4,436)     (2,252)
      Deposits and prepaid expenses                         (422)        271
      Other, net                                          (5,201)     (4,719)
    Increase (decrease) in:
      Accounts payable, trade                              7,332       7,939
      Accrued expenses and other liabilities              (4,578)     (9,493)
      Payable to parent                                      (18)        (77)
      Other noncurrent liabilities                          (614)       (208)
                                                       ---------   ---------

        Total adjustments                                  7,068      (1,953)
                                                       ---------   ---------

  NET CASH USED IN OPERATING ACTIVITIES                  (26,819)    (22,514)
                                                       ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures                                    (2,247)     (2,639)
  Proceeds from sale of property and equipment and
    other assets                                           8,225     113,636
                                                       ---------   ---------
   NET CASH PROVIDED BY INVESTING ACTIVITIES               5,978     110,997
                                                       ---------   ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings under DIP Facility                          317,571     290,405
  Repayments under DIP Facility                         (297,813)   (369,152)
  Principal payments on long-term debt                        --      (6,962)
  Principal payments under capital lease obligations        (215)       (412)
  Increase/(decrease) in cash overdrafts                   2,181      (1,876)
                                                       ---------   ---------

  NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES     21,724     (87,997)
                                                       ---------   ---------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS         883         486

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD             2,891       3,046
                                                       ---------   ---------

CASH AND CASH EQUIVALENTS, END OF PERIOD               $   3,774   $   3,532
                                                       =========   =========

              The accompanying notes are an integral part of these
                         condensed financial statements

                                       5
<PAGE>

                  LEVITZ FURNITURE CORPORATION AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                               September 30, 2000

                                   (Unaudited)

1.       CHAPTER 11 PROCEEDINGS AND BASIS OF PRESENTATION:

         Levitz Furniture Corporation (Levitz), a Florida corporation, is a
         wholly-owned subsidiary of Levitz Furniture Incorporated (LFI).

         On September 5, 1997 (the "Petition Date"), Levitz Furniture
         Incorporated, a Delaware corporation ("LFI"), and 11 of its
         subsidiaries (collectively, the "Debtors"), including, Levitz Furniture
         Corporation, a Florida corporation and wholly-owned subsidiary of LFI
         ("Levitz"), filed voluntary petitions for relief under Chapter 11,
         Title 11 of the United States Code (the "Bankruptcy Code") with the
         United States Bankruptcy Court (the "Court") for the District of
         Delaware, Wilmington, Delaware under Case No. 97-1842(MFW). Pursuant to
         Sections 1107 and 1108 of the Bankruptcy Code, Levitz as debtor and
         debtor-in-possession, has continued to manage and operate its assets
         and businesses pending the confirmation of a reorganization plan or
         plans and subject to the supervision and orders of the Court. Because
         LFI is operating as debtor-in-possession under Chapter 11 of the
         Bankruptcy Code, the existing directors and officers of Levitz continue
         to manage the operations of Levitz subject to the supervision and
         orders of the Court.

         Certain subsidiaries were not included in the Chapter 11 filings. These
         subsidiaries are inactive and the results of their operations and
         financial position are not material to the consolidated financial
         statements.

         On October 13, 2000, the Debtors filed a "Disclosure Statement" and a
         "Third Amended Joint Plan of Reorganization" ("Plan of Reorganization"
         or "Plan"), pursuant to Section 1125 of the Bankruptcy Code with the
         Court. The Plan contemplates the formation of a new holding company -
         Levitz Home Furnishings, Inc. ("LHFI") which will own 100% of the stock
         of Levitz and Seaman Furniture Company, Inc. ("Seaman") and will allow
         the operations of the two companies to be combined in certain respects.

         The following is a summary of anticipated distributions under the Plan:

                  Class 1 - Priority Claims - Will receive cash in the amount of
                  the allowed claim or such other treatment as to which the
                  Debtors and such holder shall have agreed upon in writing.

                  Class 3 - Miscellaneous Secured Claims - The legal, equitable
                  and contractual rights of a holder shall be reinstated.

                  Class 4 - Small Unsecured Claims - This claim is a small
                  unsecured claim of equal to or less than $40,000. The holder
                  will receive a percentage of the allowed claim ranging from
                  6.3% to 12.6% depending upon the classification of the claim.

                  Class 5 - General Unsecured Claims - This is an unsecured
                  claim in excess of $40,000. The holders will receive in total
                  7.0% of the LHFI Initially Issued Common Stock, in full
                  satisfaction settlement, release, and discharge of such
                  allowed claims. Each holder will receive a percentage of the
                  total stock distribution ranging from 6.3% to 12.6% depending
                  upon the classification of the claim.

                  Class 8 - Interests - A holder of a Class 8 Interest (stock or
                  interests in stock) shall not be entitled to, and shall not,
                  receive or retain any property or interest in property on
                  account of such Class 8 Interest.

                                       6
<PAGE>

         It is anticipated with LFI's emergence from bankruptcy, that LHFI will
         enter into a senior secured borrowing facility that will provide a
         maximum commitment of $100.0 million ("Senior Facility") and a junior
         secured debt facility ("Junior Facility") of at least $47.0 million. In
         addition, the overadvance term loan portion of the DIP Facility will be
         converted into LHFI equity. Also, LFI and Seaman management are
         negotiating equity commitments and other agreements with investors, in
         excess of $40.0 million. Both facilities, the conversion of the
         overadvance term notes, equity commitments and other agreements will
         allow the pay down of Levitz's DIP Facility and provide the cash and
         liquidity necessary for LHFI to continue normal operations. Management
         of LFI and Seaman are currently negotiating the Senior Facility, the
         Junior Facility the conversion of Levitz's overadvance term loans to
         LHFI equity and other equity commitments and agreements. No assurances
         can be given that these negotiations will be successful.

         The Disclosure Statement was approved by the Court on October 31, 2000
         and a hearing is scheduled for the confirmation of the Third Amended
         Joint Plan of Reorganization of the Debtors on December 8, 2000.

         The consolidated financial statements have been presented in accordance
         with the American Institute of Certified Public Accountants Statement
         of Position 90-7, "Financial Reporting by Entities in Reorganization
         under the Bankruptcy Code" (SOP 90-7) and have been prepared in
         accordance with generally accepted accounting principles applicable to
         a going concern, which principles, except as otherwise disclosed,
         assume that assets will be realized and liabilities will be discharged
         in the ordinary course of business. As a result of the Chapter 11 cases
         and circumstances relating to this event, including LFI's debt
         structure, its recurring losses, and current economic conditions, such
         realization of assets and liquidation of liabilities are subject to
         significant uncertainty. While under the protection of Chapter 11, the
         Company may sell or otherwise dispose of assets, and liquidate or
         settle liabilities, for amounts other than those reflected in the
         financial statements. Additionally, the amounts reported on the
         consolidated balance sheet could materially change because of changes
         in business strategies and the effects of any proposed plan of
         reorganization.

         In the Chapter 11 cases, substantially all unsecured liabilities as of
         the Petition Date are subject to compromise or other treatment under a
         plan of reorganization which must be confirmed by the Bankruptcy Court
         after submission for any required vote by affected parties. For
         financial reporting purposes, those liabilities and obligations whose
         treatment and satisfaction is dependent on the outcome of the Chapter
         11 cases have been segregated and classified as liabilities subject to
         compromise under reorganization proceedings in the consolidated
         condensed balance sheets. Generally, all actions to enforce or
         otherwise effect repayment of pre-Chapter 11 liabilities as well as all
         pending litigation against the Debtors are stayed while the Debtors
         continue their business operations as debtors-in-possession. Unaudited
         schedules have been filed by the Debtors with the Court setting forth
         the assets and liabilities of the Debtors as of the Petition Date as
         reflected in the Debtor's accounting records. Levitz has notified all
         known claimants subject to the August 10, 1998 bar date of their need
         to file a proof of claim with the Court. A bar date is the date by
         which claims against Levitz must be filed if the claimants wish to
         receive any distribution in the Chapter 11 cases. Differences between
         amounts shown by the Debtors and claims filed by creditors are being
         investigated and will be either amicably resolved or adjudicated before
         the Court. The ultimate amount of and settlement terms for such
         liabilities are subject to an approved plan of reorganization and
         accordingly are not presently determinable.

         Under the Bankruptcy Code, the Debtors may elect to assume or reject
         real estate leases, employment contracts, personal property leases,
         service contracts and other prepetition executory contracts, subject to
         Court approval. Claims for damages resulting from the rejection of real
         estate leases and other executory contracts will be subject to separate
         bar dates. The Debtors have not reviewed all real estate leases for
         assumption or rejection. As of September 30, 2000, the Debtors had
         rejected leases for 28 store locations, reached agreement with the
         landlord on seven store locations to terminate without liability and
         assumed and assigned leases on 38 store locations without liability.
         The Court has extended the time for which


                                       7
<PAGE>

         the Debtors may assume or reject unexpired leases of nonresidential
         real property to October 27, 2000. The Debtors have requested from the
         Court an extension of the date to December 25, 2000. No assurances can
         be given that such an extension will be granted. The liabilities
         subject to compromise include a reserve for an estimated amount that
         may be claimed by lessors for the stores that have been closed through
         September 30, 2000. The Debtors will continue to analyze their real
         estate leases and executory contracts and may assume or reject
         additional leases and contracts. Such rejections could result in
         additional liabilities subject to compromise.

         In the opinion of Management, the accompanying unaudited consolidated
         condensed financial statements contain all adjustments consisting of
         normal recurring accruals necessary to present fairly the financial
         position as of September 30, 2000; the results of operations and cash
         flows for the periods then ended. The results of operations for the
         period ended September 30, 2000, are not necessarily indicative of the
         results to be expected for the full year.

         Certain information and footnote disclosures normally included in
         financial statements prepared in accordance with generally accepted
         accounting principles have been omitted. It is suggested that these
         condensed consolidated financial statements be read in conjunction with
         the financial statements and notes thereto included in Levitz's
         unaudited financial statements for the year ended March 31, 2000, which
         is included in its Form 10-K.

2.       REVENUE RECOGNITION:

         Levitz recognizes revenue at the time a sales order is written and the
         following conditions are met: the merchandise is in stock and is
         available for sale; for a credit sale, the credit is approved by the
         financing company; and for merchandise requested to be delivered by a
         customer, a firm delivery date is set, and a down payment is received.
         In December 1999, the SEC issued Staff Accounting Bulletin ("SAB") 101,
         "Revenue Recognition in Financial Statements," which is effective no
         later than the fourth fiscal quarter of fiscal years beginning after
         December 15, 1999. This SAB provides additional guidance in applying
         generally accepted accounting principles for revenue recognition in
         consolidated financial statements. Upon the emergence from Chapter 11,
         or no later than January 1, 2001, the Company will change its method of
         accounting to record merchandise sales upon delivery of merchandise to
         customers, rather than prior to delivery, in order to be consistent
         with the provisions of SAB 101. Had the Company elected to adopt SAB
         101 at September 30, 2000, the pre-tax amount of the one-time non-cash
         charge is estimated to have been between $5.0 to $7.0 million. The
         cumulative effect of the change represents the deferral of previously
         recorded revenue, net of cost of sales and direct selling costs,
         related to merchandise that had not been delivered to the customer as
         of September 30, 2000. This change in accounting will impact future
         interim and fiscal year reporting periods based on seasonal trends in
         sales and corresponding delivery cycles. However, there will be no
         impact on the Company's cash flows from operations as a result of this
         change.

3.       DEBT:

         LFI, Levitz and substantially all of its subsidiaries, as
         debtors-in-possession, are parties to a DIP Credit Agreement dated as
         of September 5, 1997, as amended (the "DIP Facility"), with Bankers
         Trust Commercial Corp. ("BTCC") as agent. The DIP Facility approved by
         the Bankruptcy Court provides for up to $140.0 million of availability.
         The DIP Facility includes revolving loans of $85.0 million and
         overadvance term loans of $55.0 million. Letter of Credit obligations
         under the revolving DIP Facility were limited to $25.0 million. The DIP
         Facility has been intended to provide Levitz with the cash and
         liquidity necessary to conduct its operations and pay for merchandise
         shipments at normal levels during the course of the Chapter 11 Cases.


                                       8
<PAGE>

         Loans made under the DIP Facility revolving notes bear interest, at
         Levitz's option, at a rate equal to either BTCC's prime lending rate
         plus 1.50% or BTCC's LIBOR rate plus 3.75%. Levitz is required to pay
         an unused line fee of 0.50%, and a letter of credit fee of 2.0%. The
         maximum borrowings, excluding the overadvance term commitments, under
         the DIP Facility are limited to 85% of eligible Accounts Receivable,
         75% of Eligible Inventory (as both are defined in the DIP Facility)
         less any fixed asset sublimit.

         The overadvance term loan bears interest at 16%, payable monthly, and
         also requires a monthly collateral management fee equal to .75% of the
         funded balance of the overadvance term loan and secondary notes. The
         collateral management fee was paid by issuing secondary notes equal to
         the amount of the fee due each month. Effective September 1, 2000
         secondary notes are being issued to pay all interest and the monthly
         collateral management fee.

         At September 30, 2000, the outstanding balances under the DIP facility
         were $40.1 million under the revolver, $55.0 million under the
         overadvance term loan and $2.0 million of secondary notes. Excess
         availability under the DIP Facility at October 30, 2000 was $14.5
         million.

         The DIP Facility is secured by substantially all of the assets of
         Levitz and a perfected pledge of stock of Levitz and all Levitz
         subsidiaries. The DIP Facility contains restrictive covenants
         including, among other things, the maintenance of minimum earnings
         before interest, taxes, depreciation and amortization as defined
         (EBITDA), limitations on the incurrence of additional indebtedness,
         liens, contingent obligations, sale of assets, and a prohibition on
         paying dividends. LFI and Levitz are currently in compliance with the
         DIP Facility.

         On June 21, 2000, the Court approved the Eighteenth Amendment to the
         Agreement which (i) extended the DIP Facility maturity to December 31,
         2000, (ii) decreased the availability of the Revolving Loans and
         Letters of Credit to no more than $85 million, (iii) waived violations
         of EBITDA covenants required as of March 31, 2000 and set minimum
         EBITDA at negative $2,000,000 and $0 for the three and six month
         periods ending June 30 and September 30, 2000, respectively and (iv)
         provided for an increase in the Overadvance Term Loan commitment to a
         total of $45 million.

         On August 10, 2000, the Court approved the Nineteenth Amendment to the
         Agreement which (i) increased the overadvance term commitment to $55
         million and (ii) modified the borrowing base fixed asset sublimit
         definition to provide for a reduction in the borrowing base in the
         amount equal to any net proceeds from the sale of real property, and
         (iii) amended the terms of the overadvance term loan to permit the
         payment of a .75% collateral management fee on the outstanding balance
         of any secondary notes which are issued as payment-in-kind for the
         amount of the monthly collateral management fee. The Company had
         borrowed the full $55 million available under the overadvance term loan
         as of August 18, 2000.

         Effective August 31, 2000, the Court approved the Twentieth Amendment
         to the Agreement, which among other things, (i) made the proceeds of
         asset dispositions solely discretionary by BTCC as to the effect on the
         fixed asset sublimit, (ii) disallowed prepayment of the overadvance
         term loans and (iii) requires all prospective payments of interest and
         collateral fee be made by payment-in-kind issuance of secondary notes
         equal to the 16% cash interest that would otherwise be payable monthly.

         It is anticipated with Levitz's emergence from bankruptcy, that LHFI
         will enter into a senior secured borrowing facility that will provide a
         maximum commitment of $100.0 million ("Senior Facility") and a junior
         secured debt facility ("Junior Facility") of at least $47.0 million. In
         addition, the overadvance term loan portion of the DIP Facility will be
         converted into LHFI equity. Also, LFI and Seaman management are
         negotiating equity commitments and other agreements with investors, in
         excess of $40.0 million. Both facilities, the conversion of the
         overadvance term notes, equity commitments and other agreements will
         allow the pay down of Levitz's DIP


                                       9
<PAGE>

         Facility and provide the cash and liquidity necessary for LHFI to
         continue normal operations. Management of LFI and Seaman are currently
         negotiating the Senior Facility, the Junior Facility the conversion of
         Levitz's overadvance term loans to LHFI equity and other equity
         commitments and agreements. No assurances can be given that these
         negotiations will be successful.

         Levitz is exposed to market risk as a result of the terms of the
         revolver portion of the DIP Facility which requires the Company to pay
         a variable interest rate based on the fluctuation of Bankers Trust
         Company's prime lending or LIBOR rates. The change in annual cash flow
         and earnings resulting from a 1% increase or decrease in interest rates
         based on outstanding borrowings at September 30, 2000 would be
         approximately $0.4 million assuming other variables remained constant.

4.       LIABILITIES SUBJECT TO COMPROMISE:

         The principal categories of obligations classified as liabilities
         subject to compromise under reorganization proceedings are identified
         below. The amounts below in total may vary significantly from the
         stated amount of proofs of claim that have been filed with the Court
         and may be subject to future adjustment depending on Court action,
         further developments with respect to potential disputed claims,
         determination as to the value of any collateral securing claims, or
         other events. Additional claims may arise from the rejection of
         additional real estate leases and executory contracts by the Debtors.

                                                      September 30,
                                                          2000
                                                       (Dollars in
             Liabilities Subject to Compromise         (thousands)
             ---------------------------------        -------------

         Accounts payable, trade                         $ 38,901
         Accrued expenses                                  15,310
         13.375% Senior Notes due 10/15/98                 96,031 (1)
         9.625% Senior Subordinated Notes due 7/15/03     101,337 (1)
         Reserve for lease rejection claims                20,702
         Executive retirement and employment agreements    17,500
         General liability claims                             736
         Reserve for previous store closings                1,353
         Common area maintenance                              234
         Real estate taxes                                  1,407
         Personal property taxes                              485
                                                         --------
                                                         $293,996
                                                         ========
         ------------
         (1)     Includes accrued interest at September 4, 1997.

         As a result of the Chapter 11 filing, no principal or interest payments
         will be made on most pre-petition debt without Court approval or until
         a plan of reorganization providing for the repayment terms has been
         confirmed by the Court and becomes effective. Interest on pre-petition
         unsecured obligations has not been accrued after the Petition Date
         except that interest expense and principal payments will continue to be
         recorded on capital lease obligations unless the Debtors reject the
         leases. If a capital lease is rejected the obligation will be limited
         to the lease rejection claim. Contractual interest expense of $10.9
         million was not recorded on certain pre-petition debt in each of the
         six month periods ended September 30, 2000 and 1999.

5.       PRIVATE-LABEL CREDIT CARD PROGRAM:

         On September 4, 1998 Levitz and its operating subsidiaries entered into
         an agreement ("Merchant Agreement") with Household Bank (SB), N.A.
         ("Household") whereby Household would provide financing to individual
         consumers purchasing merchandise


                                       10
<PAGE>

         from Levitz ("Private-Label Credit Card Program"). The Court approved
         the Merchant Agreement and granted a first priority and security
         interest and lien to Household on certain reserves ("Merchant Risk
         Reserve") retained or accumulated by Household, totaling $22.5 million
         at September 30, 2000, and gave administrative expense status to
         substantially all obligations of Levitz arising under the Merchant
         Agreement. Both the reserves and obligations are limited to a certain
         maximum amount under the Merchant Agreement. Levitz funds the Merchant
         Risk Reserve through a reduction of 3.5% on all customer accounts
         financed.

         At September 30, 2000, Household's portfolio balance was $456.2
         million. Levitz recorded income of $13.2 million and $18.6 million for
         the six month periods ended September 30, 2000 and 1999, respectively.

         Levitz is exposed to market risk under the terms of the Household
         Agreement. Levitz may pay a fee or may receive income, based upon the
         relationship among the interest earned on the portfolio, the amount of
         the servicing fee, the cost of capital, promotional discount fees and
         credit losses. Levitz is obligated for all credit losses under the
         portfolio up to a maximum of 15% of average outstanding receivables and
         for 50% of all credit losses above 15%. Levitz is also required under
         the Merchant Agreement to fund a merchant risk reserve of 3.5% of all
         amounts financed up to a stipulated dollar amount. A one percent
         increase or decrease in the finance charge to customers or the cost of
         capital or the credit loss rate would increase or decrease the annual
         income from the portfolio by $3.5 million to $5.0 million.

6.       REORGANIZATION ITEMS:

         Store Closings

         In September 2000 Levitz closed six under-performing stores in the
         Boston Market, Reading, PA and Bakersfield, CA. Th pre-tax charge for
         the store closings was $15.4 million and included non-cash charges of
         $9.8 million primarily for the write-down of fixed assets, capital
         leases, inventory and other assets to their net realizable values and
         the recognition of lease rejection claims. Cash charges included
         severance pay of $0.6 million and continuing expenses of $5.0 million.
         In addition, property held for disposal was written down in the amount
         of $0.6 million and a lease rejection claim of $0.3 million was accrued
         on a previously closed store.

         Professional fees

         Professional fees include accounting, legal and consulting services
         provided to LFI and the Creditors' Committee which, subject to Court
         approval, are required to be paid by LFI while it is in Chapter 11.

7.       LOSS PER SHARE:

         Loss per common share is based on the weighted average number of common
         shares outstanding during each period of 1,000 shares.

8.       CONSOLIDATED STATEMENTS OF CASH FLOWS:

         Supplemental disclosures of cash flow information (dollars in
         thousands):

                                          Six Months Ended
                                            September 30,
                                          ----------------
                                           2000     1999
                                          -------  -------

         Interest paid                    $ 9,162  $12,005
                                          =======  =======

         Income tax paid (refunded), net  $     7  $    64
                                          =======  =======

                                       11
<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations

General

On September 5, 1997 (the "Petition Date"), Levitz Furniture Incorporated, a
Delaware corporation ("LFI"), and 11 of its subsidiaries (collectively, the
"Debtors"), including, Levitz Furniture Corporation, a Florida corporation and
wholly-owned subsidiary of LFI ("Levitz"), filed voluntary petitions for relief
under Chapter 11, Title 11 of the United States Code (the "Bankruptcy Code")
with the United States Bankruptcy Court for the District of Delaware,
Wilmington, Delaware ("the Court"). The bankruptcy cases of LFI and Levitz and
their affiliates are being jointly administered, for procedural purposes only,
under Case No. 97-1842(MFW). Pursuant to Sections 1107 and 1108 of the
Bankruptcy Code, LFI, as debtor and debtor-in-possession, has continued to
manage and operate its assets and businesses pending the confirmation of a
reorganization plan or plans and subject to the supervision and orders of the
Court.

Comparison of Operations

The following table sets forth Levitz's results of operations expressed as a
percentage of net sales for the periods indicated:

                                             Percentage of Net Sales
                                        -----------------------------------
                                       THREE MONTHS ENDED  SIX MONTHS ENDED
                                         September 30,       September 30,
                                        ---------------     ---------------
                                        2000      1999      2000      1999
                                        -----     -----     -----     -----
Net sales                               100.0%    100.0%    100.0%    100.0%

Cost of sales                            55.9      57.0      55.9      56.9
                                        -----     -----     -----     -----

Gross profit                             44.1      43.0      44.1      43.1

Selling, general and administrative
  expenses                               43.5      44.3      44.0      42.9

Depreciation and amortization             1.5       1.6       1.5       2.0

Interest expense                          4.5       2.5       4.1       4.2
                                        -----     -----     -----     -----

Loss before reorganization items
  and income taxes                       (5.4)     (5.4)     (5.5)     (6.0)

Reorganization items                     13.8       3.6       7.8       2.3
                                        -----     -----     -----     -----

Net loss                                (19.2)%    (9.0)%   (13.3)%    (8.3)%
                                        =====     =====     =====     =====

Comparable store sales increase/
  (decrease)                              1.9%     (2.9)%     4.7%     (1.3)%
                                        =====     =====     =====     =====


Three Months Ended September 30, 2000 Compared to Three Months Ended
September 30, 1999

Net sales of $126.9 million for the three month period ended September 30, 2000
increased $0.6 million or 0.5% from net sales of $126.3 million in the same
period for the prior year. Sales on a comparable store basis increased 1.9%.
Comparable store sales for July and August 2000 increased 0.5% and 1.9%,
respectively from the same months of the prior year. September 2000 comparable
store sales increased 3.2% from the comparable period of


                                       12
<PAGE>

the prior year. September 2000 comparable store sales did not include the Boston
Market, Reading PA and Bakersfield, CA, since these stores were closed during
the month of September 2000.

Gross profit as a percentage of net sales increased to 44.1% for the three month
period ended September 30, 2000 compared to 43.0% in the same period of the
prior year. The gross margin increase was due to increased penetration of the
new furniture warranty program and the reduction of clearance promotions and
special bedding promotions that occurred in the prior year.

Selling, general and administrative (SG&A) expenses of $55.2 million for the
period ended September 30, 2000 decreased $0.8 million or 1.4% from SG&A
expenses of $56.0 million in the same period for the prior year. The reduction
in SG&A expenses was due to a decrease of $2.2 million in advertising costs as
offset primarily by a decrease in service fee income under the Merchant
Agreement of $0.8 million and an increase in rent expense of $0.6 million due to
the sale leaseback of owned property and the sale of leasehold interests on
leased property.

Reorganization items for the three month period ended September 30, 2000
included a charge of $15.7 million for the closing of six stores in the Boston
Market, Reading, PA and Bakersfield, CA and the accrual of a lease rejection
claim on one previously closed store. Professional fees and other expenses
related to bankruptcy services rendered during the three month periods ended
September 30, 2000 and 1999 were $1.9 million and $1.5 million, respectively.

Levitz has not recorded any tax benefits for the losses incurred during the
periods ended September 30, 2000 and 1999. LFI does not anticipate recording any
tax provision for the remainder of Fiscal 2001, subject to changes in operating
performance.

As a result of the aforementioned factors, net loss for the period ended
September 30, 2000 amounted to $24.4 million or 19.2% of net sales as compared
to net loss of $11.5 million or 9.0% of net sales for the same period of the
prior year.

Six Months Ended September 30, 2000 Compared to Six Months Ended
September 30, 1999

Net sales of $255.3 million for the six month period ended September 30, 2000
increased $9.0 million or 3.7% over net sales of $246.3 million in the same
period for the prior year. Net sales on a comparable store basis increased 4.7%.
The majority of the increase in net sales on a comparable store basis is due to
the increase in net sales from the new furniture warranty program.

Gross profit as a percentage of net sales increased to 44.1% for the six month
period ended September 30, 2000 compared to 43.1% in the same period of the
prior year. The gross margin increase was due to increased penetration of the
new furniture warranty program and the reduction of clearance promotions and
special bedding promotions that occurred in the prior year.

Selling, general and administrative ("SG&A") expenses increased $2.5 million for
the six month period ended September 30, 2000 as compared to the same period for
the prior year. The increase in SG&A expenses primarily includes a reduction in
the service fee income under the Merchant Agreement of $5.4 million, an increase
in rent expense of $2.7 million due to the sale leaseback of owned property and
the sale of leasehold interests on leased property, an increase in salaries and
employee benefits of $1.4 million and an increase in delivery expense of $0.7
million as offset by a reduction in advertising costs of $3.6 million.

Depreciation and amortization for the six month period ended September 30, 2000
decreased to $3.9 million from $5.0 million or 22.0% from the same period of the
prior year. The decrease was primarily due to the closing of stores and the
disposal of those store assets.

Interest expense for the six month period ended September 30, 2000 and 1999 was
$10.4 million. Interest on pre-petition unsecured obligations has not been
accrued after the Petition Date except that interest expense continues to be
recorded on capital lease


                                       13
<PAGE>

obligations. Contractual interest expense of $11.6 million was not recorded on
certain pre-petition unsecured debt for each of the six month periods ended
September 30, 2000 and 1999.

Reorganization items for the six month period ended September 30, 2000 included
a charge of $16.3 million for the closing of six under-performing stores in the
Boston Market, Reading, PA and Bakersfield, CA in the amount of $15.4, the
write-down of $.06 million on property held for disposal and the accrual of $0.3
million for a lease rejection claim on a previously closed store. Reorganization
items for the six month period ended September 30, 1999 included a charge of
$3.1 million for revised estimates of continuing expenses on closed stores and
idle space in continuing stores as well as an additional write-down on property
held for disposal. Also included as reorganizational items are professional fees
of $3.6 million and $2.6 million for accounting, legal and consulting services
provided to LFI and the Creditors' Committee while LFI is in Chapter 11 for the
six month periods ended September 30, 2000 and 1999, respectively.

Levitz has not recorded any tax benefits for the loss incurred during the six
month periods ended September 30, 2000 and 1999. LFI does not anticipate
recording any tax provision for the remainder of Fiscal 2001, subject to changes
in operating performance.

Net loss for the six month period ended September 30, 2000 was $24.4 million or
13.3% of net sales as compared to a net loss of $20.6 million or 8.3% of net
sales for the same period of the prior year.

Liquidity and Capital Resources

Cash Flows

Levitz's primary sources of liquidity are cash flow from operations (including
the proceeds from customer credit obligations under the Private-Label Credit
Card Program by Household), trade credit and borrowings under the DIP Facility.
During the six month period ended September 30, 2000, Levitz used approximately
$19.9 million of net cash flow in operations before changes in operating assets
and liabilities. Changes in operating assets and liabilities further reduced net
cash flow from operations by $6.9 million. Increases in inventory of $4.4
million, deposits and prepaid expenses of $0.4 million, other assets (largely
the Household Merchant Risk Reserve under the Private-Label Credit Card Program)
of $5.2 million and the reduction of accrued expenses and non-current
liabilities of $5.2 million had an unfavorable impact on cash flow. Cash flow
was favorably impacted by an increase in trade payables of $7.3 million and a
decrease in customer receivables of $1.0 million. The decrease in accrued
expenses was primarily due to the reduction in amounts payable under the
Merchant Agreement of $10.1 million, reduction in accrued operating expenses of
$1.6 million as offset by the increase in store closing reserves of $7.1 million
primarily due to the stores closed in September 2000.

Cash provided by investing activities for the six month period ended September
30, 2000 includes $1.3 million of proceeds from the sale of closed stores and
other assets and $6.9 million in proceeds from sale-leaseback transactions on
continuing stores, the net proceeds from which were applied as repayments to the
DIP Facility as required by the agreement.

Levitz's total capital expenditures were approximately $2.2 million during the
six month period ended September 30, 2000. The capital expenditures were for
existing store renovations and equipment. Levitz capital expenditures for the
remainder of the fiscal year will depend on obtaining new financing at the
effective date of the Plan of Reorganization. If the new financing is obtained
it is expected that capital expenditures will increase significantly and the
increase will primarily be for warehouse consolidations and store relocations.

Net cash used in financing activities amounted to $21.7 million during the six
month period ended September 30, 2000. Net borrowings under the DIP Facility
were $19.8 million. Principal payments under capital lease obligations were $0.2
million and outstanding checks and cash overdrafts increased $2.2 million.

                                       14
<PAGE>

Debt

LFI, Levitz and substantially all of its subsidiaries, as debtors-in-possession,
are parties to a DIP Credit Agreement dated as of September 5, 1997, as amended
(the "DIP Facility"), with Bankers Trust Commercial Corp. ("BTCC") as agent. The
DIP Facility approved by the Bankruptcy Court provides for up to $140.0 million
of availability. The DIP Facility includes revolving loans of $85.0 million and
overadvance term loans of $55.0 million. Letter of Credit obligations under the
revolving DIP Facility were limited to $25.0 million. The DIP Facility has been
intended to provide Levitz with the cash and liquidity necessary to conduct its
operations and pay for merchandise shipments at normal levels during the course
of the Chapter 11 Cases.

Loans made under the DIP Facility revolving notes bear interest, at Levitz's
option, at a rate equal to either BTCC's prime lending rate plus 1.50% or BTCC's
LIBOR rate plus 3.75%. Levitz is required to pay an unused line fee of 0.50%,
and a letter of credit fee of 2.0%. The maximum borrowings, excluding the
overadvance term commitments, under the DIP Facility are limited to 85% of
eligible Accounts Receivable, 75% of Eligible Inventory (as both are defined in
the DIP Facility) less any fixed asset sublimit.

The overadvance term loan bears interest at 16%, payable monthly, and also
requires a monthly collateral management fee equal to .75% of the funded balance
of the overadvance term loan and secondary notes. The collateral management fee
was paid by issuing secondary notes equal to the amount of the fee due each
month. Effective September 1, 2000 secondary notes are being issued to pay all
interest and the monthly collateral management fee.

At September 30, 2000, the outstanding balances under the DIP facility were
$40.1 million under the revolver, $55.0 million under the overadvance term loan
and $2.0 million of secondary notes. Excess availability under the DIP Facility
at October 30, 2000 was $14.5 million.

The DIP Facility is secured by substantially all of the assets of Levitz and a
perfected pledge of stock of Levitz and all Levitz subsidiaries. The DIP
Facility contains restrictive covenants including, among other things, the
maintenance of minimum earnings before interest, taxes, depreciation and
amortization as defined (EBITDA), limitations on the incurrence of additional
indebtedness, liens, contingent obligations, sale of assets, and a prohibition
on paying dividends. LFI and Levitz are currently in compliance with the DIP
Facility.

On June 21, 2000, the Court approved the Eighteenth Amendment to the Agreement
which (i) extended the DIP Facility to December 31, 2000, (ii) decreased the
availability of the Revolving Loans and Letters of Credit to no more than $85
million, (iii) waived violations of EBITDA covenants required as of March 31,
2000 and set minimum EBITDA at negative $2,000,000 and $0 for the three and six
month periods ending June 30 and September 30, 2000, respectively and (iv)
provided for an increase in the Overadvance Term Loan commitment to a total of
$45 million.

On August 10, 2000, the Court approved the Nineteenth Amendment to the Agreement
which (i) increased the overadvance term commitment to $55 million and (ii)
modified the borrowing base fixed asset sublimit definition to provide for a
reduction in the borrowing base in the amount equal to any net proceeds from the
sale of real property, and (iii) amended the terms of the overadvance term loan
to permit the payment of a .75% collateral management fee on the outstanding
balance of any secondary notes which are issued as payment-in-kind for the
amount of the monthly collateral management fee. The Company had borrowed the
full $55 million available under the overadvance term loan as of August 18,
2000.

Effective August 31, 2000, the Court approved the Twentieth Amendment to the
Agreement, which among other things, (i) made the proceeds of asset dispositions
solely discretionary by BTCC as to the effect on the fixed asset sublimit, (ii)
disallowed prepayment of the overadvance term loans and (iii) requires all
prospective payments of interest be made by payment-in-kind issuance of
secondary notes equal to the 16% cash interest that would otherwise be payable
monthly.

                                       15
<PAGE>

It is anticipated with LFI's emergence from bankruptcy, that LHFI will enter
into a senior secured borrowing facility that will provide a maximum commitment
of $100.0 million ("Senior Facility") and a junior secured debt facility
("Junior Facility") of at least $47.0 million. In addition, the overadvance term
loan portion of the DIP Facility will be converted into LHFI equity. Also, LFI
and Seaman management are negotiating equity commitments and other agreements
with investors, in excess of $40.0 million. Both facilities, the conversion of
the overadvance term notes, equity commitments and other agreements will allow
the pay down of Levitz's DIP Facility and provide the cash and liquidity
necessary for LHFI to continue normal operations. Management of LFI and Seaman
are currently negotiating the Senior Facility, the Junior Facility the
conversion of Levitz's overadvance term loans to LHFI equity and other equity
commitments and agreements. No assurances can be given that these negotiations
will be successful.

Private-Label Credit Card Program

On September 4, 1998 Levitz and its operating subsidiaries entered into an
agreement ("Merchant Agreement") with Household Bank (SB), N.A. ("Household")
whereby Household would provide financing to individual consumers purchasing
merchandise from Levitz ("Private-Label Credit Card Program"). The Court
approved the Merchant Agreement and granted a first priority and security
interest and lien to Household on certain reserves ("Merchant Risk Reserve")
retained or accumulated by Household, totaling $22.5 million at September 30,
2000, and gave administrative expense status to substantially all obligations of
Levitz arising under the Merchant Agreement. Both the reserves and obligations
are limited to a certain maximum amount under the Merchant Agreement. Levitz
funds the Merchant Risk Reserve through a reduction of 3.5% on all customer
accounts financed.

At September 30, 2000, Household's portfolio balance was $456.2 million. Levitz
recorded income of $13.2 million and $18.6 million for the six month periods
ended September 30, 2000 and 1999, respectively.

Levitz is exposed to market risk under the terms of the Household Agreement.
Levitz may pay a fee or may receive income, based upon the relationship among
the interest earned on the portfolio, the amount of the servicing fee, the cost
of capital, promotional discount fees and credit losses. Levitz is obligated for
all credit losses under the portfolio up to a maximum of 15% of average
outstanding receivables and for 50% of all credit losses above 15%. Levitz is
also required under the Merchant Agreement to fund a merchant risk reserve of
3.5% of all amounts financed up to a stipulated dollar amount.

Going Concern

The Company believes that cash on hand, amounts available under the DIP
Facility, as amended, and funds from operations will enable the Company to meet
its current liquidity and capital expenditures requirements.

On October 13, 2000, the Debtors filed a "Disclosure Statement" and a "Third
Amended Joint Plan of Reorganization" ("Plan of Reorganization" or "Plan"),
pursuant to Section 1125 of the Bankruptcy Code with the Court. The Plan
contemplates the formation of a new holding company ("LHFI") which will own 100%
of the stock of Levitz and Seaman Furniture Company, Inc. ("Seaman") and to
allow the operations of the two companies to be combined in certain respects.
Under the Plan, Class 5 General Unsecured Creditors will receive stock in LHFI
and Levitz's stockholders and other parties holding equity interests in Levitz
will not receive any distributions.

         The following is a summary of anticipated distributions under the Plan:

                  Class 1 - Priority Claims - Will receive cash in the amount of
                  the allowed claim or such other treatment as to which the
                  Debtors and such holder shall have agreed upon in writing.

                  Class 3 - Miscellaneous Secured Claims - The legal, equitable
                  and contractual rights of a holder shall be reinstated.

                                       16
<PAGE>

                  Class 4 - Small Unsecured Claims - This claim is a small
                  unsecured claim of equal to or less than $40,000. The holder
                  will receive a percentage of the allowed claim ranging from
                  6.3% to 12.6% depending upon the classification of the claim.

                  Class 5 - General Unsecured Claims - This is an unsecured
                  claim in excess of $40,000. The holders will receive in total
                  7.0% of the LHFI Initially Issued Common Stock, in full
                  satisfaction settlement, release, and discharge of such
                  allowed claims. Each holder will receive a percentage of the
                  total stock distribution ranging from 6.3% to 12.6% depending
                  upon the classification of the claim.

                  Class 8 - Interests - A holder of a Class 8 Interest (stock or
                  interests in stock) shall not be entitled to, and shall not,
                  receive or retain any property or interest in property on
                  account of such Class 8 Interest.

It is anticipated with LFI's emergence from bankruptcy, that LHFI will enter
into a senior secured borrowing facility that will provide a maximum commitment
of $100.0 million ("Senior Facility") and a junior secured debt facility
("Junior Facility") of at least $47.0 million. In addition, the overadvance term
loans portion of the DIP Facility is to be converted into LHFI equity. Also, LFI
and Seaman management are negotiating equity commitments and other agreements
with investors, in excess of $40.0 million. Both facilities, the conversion of
the overadvance term notes, equity commitments and other agreements will allow
the pay down of Levitz's DIP Facility and provide the cash and liquidity
necessary for LHFI to continue normal operations. Management of LFI and Seaman
are currently negotiating the Senior Facility, the Junior Facility the
conversion of Levitz's overadvance term loans to LHFI equity and other equity
commitments and other agreements. No assurances can be given that these
negotiations will be successful.

The Disclosure Statement was approved by the Court on October 31, 2000 and a
hearing is scheduled for the confirmation of the Third Amended Joint Plan of
Reorganization of the Debtors on December 8, 2000. The exclusivity period to
file a plan of reorganization will expire on December 29, 2000.

                                       17
<PAGE>

PART II OTHER INFORMATION:

Item 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibit 10.74: Amendment No. 20 dated as of August 31, 2000 to
                  the Postpetition Credit Agreement among Levitz Furniture
                  Incorporated, et al. and BT Commercial Corporation, as agent.

                  Exhibit 27:  Financial Data Schedule

         (b)      Report on Form 8-K:

                  On August 10, 2000, the registrant filed a Report on Form 8-K
                  under "Item 5: Other Events" disclosing its request of the
                  Bankruptcy Court to dismiss an adversary proceeding it had
                  filed in May 2000 against certain minority shareholders of
                  Seaman Furniture Co., Inc. Also disclosed were plans to close
                  four stores in the Boston Market, a store in Reading, PA and
                  one in Bakersfield, CA.

                                       18
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Security Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                     LEVITZ FURNITURE CORPORATION
                                              (Registrant)




Date:  November 13, 2000             /s/ MICHAEL MCCREERY
                                     -------------------------------------------
                                         Michael McCreery
                                         Senior Vice President and
                                         Chief Financial Officer

                                       19
<PAGE>

                                  EXHIBIT INDEX

                              Exhibits to Form 10-Q

   Number
Exhibit Table                         Exhibit
-------------                         -------

    10.74         Amendment No. 20 dated as of August 31, 2000 to the
                  Postpetition Credit Agreement among Levitz Furniture
                  Incorporated, et al. and BT Commercial Corporation, as agent.

    27            Financial Data Schedule.

                                       20