UPDATE 1-Proxy adviser backs Furniture Brands nominees

(Adds adviser comment, background)

ATLANTA, April 22 (Reuters) - Shareholder advisory service Proxy Governance on Tuesday urged Furniture Brands International Inc (FBN.N: Quote, Profile, Research) shareholders to vote for the company's board nominees instead of three candidates proposed by Sun Capital, a private equity firm.

The adviser said that while it had concerns about the furniture maker's performance, the company has made substantial management changes in 2007 and 2008 and has reduced debt and improved its cash position and per-share profit within months of announcing a turnaround plan.

"We are not projecting that the turnaround is done, but the demonstrable improvements suggest that the board has taken appropriate actions," said Chris Cernich, senior research analyst for mergers and acquisitions at Proxy Governance.

"I didn't see that the dissidents put up a strong counter-argument about where specifically (the strategic plan) was flawed, what it missed and what else they might do," he added.

Furniture Brands makes Broyhill, Thomasville, Henredon and Lane furniture.

Sun Capital, which owns 9.5 percent of Furniture Brands and expressed interest in buying the company earlier this year, has nominated three people to the Furniture Brands board, setting up a potential showdown at the annual meeting on May 1.

On Monday, RiskMetrics Group Inc's (RMG.N: Quote, Profile, Research) ISS Governance Services recommended that investors support Sun Capital's nominees in the proxy contest.

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