Malden Mills has filed for an extension in its bid to emerge from bankruptcy to give CEO Aaron Feuerstein more time to raise the funds necessary to buy back controlling interest in the company. It now looks like September 10th is the target day to exit Chapter 11 protection intact and under Feuersteins control.
The CEO faced a deadline yesterday to raise the approximately $92 million required to regain control of the company. Feuerstein had a setback on Monday when the U.S. Export-Import Bank in Washington ponied up just $20 million of the required $35 million in loan guarantees he needed to secure the funding. His attorneys filed papers Tuesday requesting an extension of his buyback deadline until September 10, 2003, or later if the emergence date is pushed back again.
Feuerstein had until the August 26th date to exercise his option on the buyback at the $92 million level, but the details of the companys approved reorganization plan call for the exercise price to increase to $124 million if not executed by that date.
The lead creditor in the case, GE Capital, said that it was willing to accept a 30-day extension of the deadline. But the unsecured creditors are now the fly in the ointment, with a key attorney representing the group vowing to “vigorously oppose this request” for the extension to September 10, 2003.
Feuerstein said he has secured the necessary funds for the buyback, but needs the full $35 million loan guarantee to make it work. He said he intends to reapply for the full amount and need the deadline extended to do so.
The CEO had garnered much praise for supporting Malden workers after a plant fire and is supported in his bid with the U.S. Export-Import Bank, a government agency. Senator Edward Kennedy has taken the lead in the lobbying efforts and is supported by the New Hampshire delegation as well. Approximately 500 of the 1,200 Malden workers live in New Hampshire.
