Court approves Sure Fit sale
August 9, 2004-- Home Textiles Today,
Judge Burton Lifland approved the sale of Sure Fit's assets to New York-based investment firm DE Shaw and bath-towel producer J.R. United. The decision took place on Aug. 5 at the U.S. Bankruptcy Court of the Southern District of New York.
According to the committee of unsecured creditors, the parties will pay $16.5 million in cash and assume $4 million of Sure Fit's liabilities.
"We would have liked to see a greater recovery from the auction but, under the circumstances, we were satisfied with the result," said Joel Levitin, Sure Fit's lead attorney with Dechert, LLP, a New York-based law firm.
Priority claims in the Sure Fit bankruptcy proceedings include Wachovia Bank, which is owed more than $27 million and GE Capital, which has an $8 million lien on equipment and other assets.
Final details are expected to follow this week when the deal officially closes.
In December 2003, DE Shaw agreed to buy FAO Schwarz's flagship store and other assets when the retailer filed for bankruptcy.
According to company officials, the change of ownership will mean "business as usual" for the slipcover manufacturer, which will be able to keep its management and operations in place, at least for now.
Sure Fit recently began closing its sewing facility in Hanover Township, Pa., by Sept. 23. About 180 employees, primarily sewers, will lose their jobs. The plant's remaining 350 employees will work at the company's two facilities in Upper Macungie Township.
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