Malden Mills plans Ch. 11 reorganization, then sale
By Furniture Today Staff -- Furniture Today, February 5, 2007
Lawrence, Mass. — Malden Mills, once a major supplier of fabrics to the furniture industry, will reorganize under Chapter 11 and then be sold to either Boston-based Gordon Brothers Group or Philadelphia-based Chrysalis Capital Partners.
Both turnaround specialists have offered $44 million for the troubled business.
Malden Mills, which now produces Polartec fleece and other specialty fabrics for customers like Lands' End, North Face and the Pentagon, said its operations will continue normally during the reorganization and sale.
The company has struggled since a fire in December 1995 destroyed its main plant. Aaron Feuerstein, then the company's third-generation owner, earned fame for insisting that workers be kept on the payroll after the fire.
Malden filed for bankruptcy in 2001 and emerged as a reorganized company in 2003, under the control of lenders led by General Electric Capital. Feuerstein was unsuccessful in his efforts to buy back the company in 2004.
CEO Michael Spline said the planned sale "transitions the company into a state of permanent ownership and financial stability."
Yarn supplier Unifi is listed fifth among Malden Mills' creditors, with about $300,000 owed to it.
