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Globe Manufacturing forced into Chap. 11

NEW YORK -- Three creditors have forced Globe Manufacturing Corp., the maker of Glospan spandex, into an involuntary bankruptcy proceeding in Boston.<BR><BR>The Chapter 11 filing, which occurred on Dec. 20, was filed by Shenkman Capital Management...

NEW YORK — Three creditors have forced Globe Manufacturing Corp., the maker of Glospan spandex, into an involuntary bankruptcy proceeding in Boston.

The Chapter 11 filing, which occurred on Dec. 20, was filed by Shenkman Capital Management Inc., Indosuez Capital and Continental Casualty Co.

Globe Manufacturing said in a statement that the creditors are a group of holders of its 10 percent senior subordinated notes due August 2008.

Richard Heitmiller, chief executive officer of Globe Manufacturing, said: “This involuntary petition will not affect our ability to meet our obligations to customers and vendors. We will continue to operate our business while we examine strategic alternatives as to how to implement our restructuring plan.”

Heitmiller explained: “We have been making steady progress in our development of a financial and operational restructuring of the company when this action was taken by certain bondholders. We believe this action was premature and are currently evaluating our options. Our objective remains clear, however, that we intend to develop a restructuring plan that substantially reduces our debt and places the company on firmer financial footing.”

Globe Manufacturing has been in discussions over the last several months with the bondholders, as well as its other creditor groups, regarding a restructuring of its debt. Discussions with its bank lenders are “ongoing,” and the various strategic alternatives include a possible sale of the company and an operational restructuring.

Established in 1945, the Fall River, Mass.-based firm produces Glospan and Cleerspan spandex performance fibers.