Lenders notify Quaker Fabric of default
July 11, 2007,
Fall River, Mass. – In the wake of its July 2 announcement that it would likely not meet its current loan requirements and would likely liquidate its assets, woven upholstery and jacquard manufacturer Quaker Fabric has received default notices from its main lenders,Bank of America and GB Merchant Partners.
In an SEC filing yesterday, Quaker said that as of July 3, 2007 , there were $34.2 million of loans outstanding under its 2006 loan agreements with the lenders. One effect of the default notices is to increase the interest rate on the loans by 2%.
The Quaker filing notes that the lenders say they each “have the right to demand immediate repayment of all amounts outstanding under the loans upon the occurrence of the events of default described in the default notices. To date, neither the Bank nor GB has made any such demand.”
Quaker also revealed that on July 3, “the employment relationships of the following officers of the company were terminated:” Michael Costa, principal accounting officer, James Dulude, vp-manufacturing, and Thomas Muzekari, vp-sales.