Dan River unveils plan
Staff -- Home Textiles Today, 8/9/2004
NEW YORK — Textiles producer Dan River Inc., working its way through Chapter 11, has filed a plan of reorganization in U.S. Bankruptcy Court that calls for paying unsecured creditors — mostly raw material and merchandise suppliers — in newly minted stock once the company exits bankruptcy.
In a conventional debt-for-equity swap, the company's common stock, now worth 2 cents a share, would be cancelled — a move that would have a punishing impact on senior managers, including Joseph Lanier Jr., chairman and CEO.
New common stock would be issued once the company exits bankruptcy, and given to unsecured creditors with claims exceeding $2,500 on a pro rata basis, making them the company's owners. Unsecured claims less than $2,500 would be paid in cash.
