Malden Mills Industries, Inc. late Thursday announced that it's consensual plan of reorganization has been confirmed by Judge Joel B. Rosenthal of the United States Bankruptcy Court in Worcester, MA. As a result, the company will successfully emerge from Chapter 11 on August 26, 2003. The company is emerging from bankruptcy intact with 1200 employees based in Lawrence, MA, Methuen, MA and Hudson, NH.
This approved plan of reorganization contains a 3-year buyback option for CEO Aaron Feuerstein to retain control of Malden Mills. Mr. Feuerstein may exercise the option at any time during the 3-year period. However, if he does not exercise his option by August 26, 2003, the buyback price increases. Commenting on the buyback process, Mr. Feuerstein said, “I am very confident that I will exercise the buyout option, as I am in the final stages of obtaining the required funds.”
Malden Mills has an application before the Export-Import Bank of the United States. When asked for comment, Mr. Feuerstein stated, “As a strong exporter, we at Malden Mills look forward to the Ex-Im Bank's consideration of our request.”
Should Mr. Feuerstein not execute his buyback option by August 26, 2003, a lender group led by General Electric Capital Corporation will then hold majority control of Malden Mills. Mr. Feuerstein would continue in his role as Chairman and President and as a member of the Board of Directors. He would also remain as a minority owner.
Malden Mills is best known as the innovator, manufacturer and marketer of Polartec(R) brand technical fabrics. During 2003, Malden Mills and Polartec(R) products have continued to receive strong support from customers and consumers around the world. The result has been growing earnings and a strong balance sheet. Significant improvements have resulted from the restructuring of the business including more efficient manufacturing, new product innovation, strengthening of the Polartec(R) brand and diversification into the military, hunting, fitness and electronic textile markets.
Regarding the successful turnaround, CEO and President Aaron Feuerstein stated, “I am thankful to our lenders, in particular GE Capital, as well as the creditors committee for working with us to create a plan of reorganization that will insure Malden Mills' future success. This past year has been one of the most challenging in our company's history. I have often said that our employees are Malden Mills' greatest asset. The way that we have overcome adversity to continue to innovate and manufacture high quality Polartec(R) products has again proven our people to be world class. I am looking forward to successfully emerging from Chapter 11 and expect our best days to lie ahead.”
Malden Mills Executive Vice President Cesar Aguilar said, “On behalf of all of our employees, I would like to thank our customers and suppliers who have helped our company through this challenging time. We are fortunate to work with the best technical garment makers in the world and it is their quest for excellence that continues to drive our innovation. We are emerging from Chapter 11 a more focused company, with a strong commitment to customer service and a dedication to creating the most advanced performance materials in the world.”
The company filed Chapter 11 on November 29th, 2001. The filing was necessitated by the cost of servicing bank debt. A number of factors contributed, including the high costs associated with rebuilding after the devastating December 11, 1995 fire. Company owner Aaron Feuerstein has continued to be recognized around the world for his example of corporate responsibility for his decision to rebuild the day after the fire — and pay idled employees during the process. Corporate responsibility to the employees, community and the environment continue to be the core values of Malden Mills.