In the on-going saga of Malden Mills most recent bankruptcy, the company has filed for chapter 7 in an effort to dismantle the former entity known as Malden Mills and to start the business anew under the name Polartec, LLC. The attorneys for Malden filed papers with the court to convert the Chapter 11 proceedings into a Chapter 7 liquidation, because the talks between GE Capital and the Creditors Union have been “fruitless.”
A spokesperson for Polartec LLC told The B.O.S.S. Report that the Chapter 7 proceedings should have no impact on the underlying day-to-day business, rather the new categorization is simply a method for the new company to clean up its balance sheet in a more efficient manner.
Once liquidated, Polartec LLC is expecting to actually have more resources at its disposal, with less debt on the balance sheet and a more stable financial structure. The new company will be a separate legal entity, with no ties to Malden Mills, Inc.
In other news, the Bankruptcy auction only attracted one bidder, Chrysalis Capital Partners, who will pay $44 million for the company. According to court documents obtained by BOSS, part of the proceeds from the sale will be used to fund the conversion to Chapter 7 and settle any remaining costs from the Chapter 11 case, as long as the conversion is completed within 10 days of the case closing.
