Court approves Foamex financing plan
November 29, 2006-- Home Textiles Today,
Linwood,Pa.– A U.S. Bankruptcy Court inDelawarehas approved a financing plan and disclosure statement for foam producer Foamex International, a move that could lead to the company’s emergence from Chapter 11 protection early next year.
Foamex chairman Raymond Mabus called the approval “a significant milestone” in the Chapter 11 process, and said it means Foamex can begin soliciting support for its reorganization plan. The court has scheduled a Jan. 18 hearing to consider confirmation of the plan, the company said.
Under terms of the plan, all secured and unsecured creditors, as well as the holders of Foamex bonds, will receive 100% of their allowed claims in cash. Existing common stockholders will keep their shares, but each share of preferred stock will be converted into 100 shares of common stock.
The company has commitments for up to $790 million in new loans and will raise $150 million in equity financing through a rights offering.
(By Larry Thomas, Business Editor at Furniture Today, HTT’s sister publication.)