NEW YORK -- Struggling to come up with a reorganization plan, The Leslie Fay Cos. said Monday it is "considering a number of options" to placate creditors and set the firm on sound financial ground.
Among the options under review, a company spokesman said, is to emerge from Chapter 11 as "a stand-alone company," or "the sale of some piece of the business." Leslie Fay has been operating in Chapter 11 since April 1993.
Meanwhile, company officials denied persistent reports that it is considering a selloff of the Leslie
Fay name. John J. Pomerantz, Leslie Fay's chairman and chief executive officer, said that such a scenario was "outright not one of the things being considered."
A joint statement issued Monday by the company and its equity and creditors commitees said "no decisions have been made with reference to the sale or disposition of any significant line or lines of business."
Right now, the company is looking to buy some time and Thursday will ask the bankruptcy court for an extension to file its business plan. The company has revised its financial forecast downward three times in the last few months, and now expects to report "a substantial operating loss for the year."
The 47-year-old company -- founded by Pomerantz's father, the late Fred Pomerantz, and named for his sister -- wouldn't say how deep the loss would be, but said it would not be as bad as last year's $32.6 million operating loss.
In October, the company closed its Theo Miles omnibus division after it failed to perform at retail. Laura Pomerantz, senior vice president in charge of the division and the wife of John Pomerantz, consequently left the firm.
A hearing will be held Thursday to rule on Leslie Fay's motion to extend until Feb. 17 its exclusivity period for submitting a business plan to the court. The motion for more time says that Leslie Fay needs to complete negotiations with creditor and equity committees in order to finish its business plan.
This will be the third time the company has asked for an extension of its exclusivity period.
According to the motion filed by Weil, Gotshal & Manges, Leslie Fay's counsel, the company, its creditors and equity committees are discussing "reorganization alternatives" related to "financing, corporate structures, tax ramifications and the level and type of distribution to creditors and equity interests."
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