TSG files Chapter 11
Staff Staff -- Furniture Today, November 30, 2009
North Wales, Pa. – On the brink of a loan default, fabric finisher TSG Incorporated filed for Chapter 11 bankruptcy protection yesterday in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania.
The 108-year-old company, now in its fifth generation of family ownership and management, is a major domestic supplier of finishing services to the decorative home furnishings industry as well as contract, institutional, medical, industrial and apparel fabric firms.
Its four operating divisions include: Synfin Industries, Synthetics Finishing, Combeau Industries, and Longview Machinery Company.
TSG owes PNC Bank approximately $4.9 million under three separate loans, which were secured by “substantially all” of the company’s property and some of its mortgages, according to bankruptcy court documents. One of the loans is due to mature today, another tomorrow.
While the third loan won’t mature until Dec. 1, 2010, defaulting on any one loan automatically throws the others into default, the company told the court.
Under the terms of its loan agreements, TSG owes the bank more than $2.7 million as of tomorrow, according to court records. TSG told the court it had tried and failed over several months to reach an agreement with PNC.
The fabric finisher has asked the court to allow it to use cash collateral to keep its operations running and also requested an expedited ruling on the matter.
PNC cut off access to TSG’s loan in late July, and the fabric finisher has been running operations using accounts receivable, the company said.
TSG is the second fabric-related business this month to have its funding by PNC shut off. In early November, fabric supplier Weave Corp. turned its assets over to the bank after PNC called loans worth $8.7 million. Weave has since re-opened.
TSG continues to operate. It began in 1901 as Levy’s International Water Shrinking and Drying Company. At its peak, it employed 500 hundred people and operated five facilities in Pennsylvania and North Carolina. Today it employs 105.
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