GHCL bonds at issue in London legal action

-- Home Textiles Today, 3/18/2009 11:50:00 AM

London – Bondholders say they will file suit in England seeking to make certain 2011-maturity bonds issued by GHCL Limited due and payable now.

The India-based GHCL is a diversified company that last year moved to spin off its home textiles and retail holdings, which included American legacy mill Dan River, which GHCL shut down in 2008 (it had acquired Dan River in 2006); HW Baker and Best Textiles, two other U.S. producers; and Rosebys, a U.K.-based home furnishings retailer (GHCL was also branding its India retail operations as Rosebys).

Weil, Gotshal & Manges LLP, a legal practice based here, said it is representing “bondholders who hold a qualifying supermajority” of some of the $70 million, 1% convertible bonds due 2011. These bondholders will file proceedings aimed at obtaining a court declaration “that the Bonds have become due and payable as a result of events of default having occurred…by virtue of certain of GHCL Limited's subsidiaries being placed in administration and subsequently selling substantially all their assets, and certain of GHCL Limited's subsidiaries being placed into a reorganisation proceeding under Chapter 11 of the U.S. Bankruptcy Code.”

Dan River filed Chapter 11 on April 20, 2008. In the wake of that action, a group of Pakistani mills took legal steps against Dan River/GHCL, attempting to recoup goods they had produced that had been ordered by GHCL through Dan River.

In the current case, holders of the bonds in question, which were issued under a Trust Deed dated Sept. 21, 2005, are invited to contact James Cole at the law firm: james.cole@weil.com or +44 (207) 903-1359.