Foamex Files for Chapter 11
February 23, 2009-- Home Textiles Today,
Polyurethane foam producer Foamex International filed for Chapter 11 bankruptcy protection on February 18, saying it hopes to restructure its debt-laden balance sheet and emerge in about six months.
The company, a major supplier for furniture and bedding producers, said it has secured $95 million in DIP financing from Matlin Patterson Global Opportunities Partners and Bank of America, and plans to continue normal operations.
"Like many companies around the world, Foamex has been hit hard by the economic downturn in the market we serve," said Jack Johnson, president and ceo. "Although we have reduced debt by approximately $240 million to $380 million over the past two years, we cannot support the existing heavy debt load in the current operating environment."
According to documents filed with U.S. Bankruptcy Court in Wilmington, Del., the largest creditor is Dow Chemical, owed $18.1 million. Milliken & Co., a textile and chemical manufacturer, is next at $2.9 million.
The bankruptcy filing is the company's second in recent years. Foamex filed for Chapter 11 in September 2005 and emerged in 2007.
(Reported by Larry Thomas, business editor of HTT sister publication Furniture Today.)
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