Foamex International files for Chapter 11
-- Home Textiles Today, 2/19/2009 9:51:00 AM
Media, Pa. — Polyurethane foam producer Foamex International filed for Chapter 11 bankruptcy protection Wednesday, saying it hopes to restructure its debt-laden balance sheet.
The company, a major supplier for furniture and bedding producers, said it has secured $95 million in debtor-in-possession financing from Matlin Patterson Global Opportunities Partners and Bank of America, and plans to continue normal day-to-day operations.
"Like many companies around the world, Foamex has been hit hard by the economic downturn in the market we serve," said Jack Johnson, president and ceo. "Although we have reduced debt by approximately $240 million to $380 million over the past two years, we cannot support the existing heavy debt load in the current operating environment."
According to documents filed with U.S. Bankruptcy Court in Wilmington, Del., the company's largest creditors primarily are chemical companies. The largest is Dow Chemical, which is owed $18.1 million. Milliken & Co., a textile and chemical manufacturer, is next at $2.9 million.
Johnson said he hopes Foamex can emerge from bankruptcy protection in about six months.
The filing is the company's second bankruptcy filing in the past four years. Foamex filed for Chapter 11 protection in September 2005 and emerged in the spring of 2007.
(Reported by Larry Thomas, business editor of HTT sister publication Furniture Today.)
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