ROME — Both sides of a breach of contract lawsuit involving Carpets of Dalton agreed Tuesday to continue to work toward a settlement of their dispute.

Attorneys for the plaintiff, First Tennessee Bank, and Carpets of Dalton, Inc., were in U.S. District Court in Rome Tuesday, appearing before Judge Harold L. Murphy.

During the short hearing, both parties stated they were working toward some sort of conclusion to the suit, but asked for another hearing in October. Except for the initial filings in the case, all of the documents relating to it have been sealed.

First Bank of Tennessee filed the lawsuit in January, alleging that the giant carpet distributor defaulted on a $12.4 million loan and asked for $13.83 million in damages. Carpets of Dalton has paid back a portion of that loan.

Carpets of Dalton, which the magazine Floor Covering News Weekly ranks as one of the top 50 floor covering retailers in the country, is still open but because of this suit its future is still unclear. Neither bank officials nor Carpets of Dalton officials have talked to The Daily Citizen about the future plans for the company, which last month was forced to have a bank-order liquidation sale. Since 2008, Carpets of Dalton’s sales have plummeted by more than 50 percent.

Late last year, Carpets of Dalton officials released a two-page statement about the company’s “restructuring initiatives” that began in 2009.

“My family and I would like to personally thank all our customers and suppliers for their continued support during these difficult and changing times,” company founder Lamar Hennon said in the statement. “The Dalton area is our home; we are committed to continue to set the highest standard in retailing for our friends and neighbors, to ensure the highest quality products are available at fair and reasonable prices, and to continue to provide quality employment opportunities for decades to come.”

The Rome News-Tribune contributed to this report