NEW YORK — Malden Mills Industries Inc., which filed for Chapter 11 last fall during a wave of bankruptcies that swamped many top U.S. mills, said Monday that it expects to file its reorganization plan with a Worcester, Mass., U.S. Bankruptcy Court by the end of the month.
This story first appeared in the August 6, 2002 issue of WWD. Subscribe Today.
David Costello, business manager at the Lawrence, Mass.-based maker of polyester fleece, said if the court approves its plan, the company expects to return to solvency by the end of the year.
He declined to detail the proposed reorganization plan, “because the negotiations continue right now, and it is very hot and heavy as we move toward the date. We will be talking about the details until the day we file.”
When it went bankrupt in November, Malden was carrying about $140 million in debt. GE Capital is its chief creditor.
Company executives have spent much of their energy since the bankruptcy filing to improve the efficiency of the company’s main plant in Lawrence, as well as a satellite facility in Goerlitz, Germany. Officials have toyed with the idea of moving some production to a lower-cost nation, such as China, but Costello said no decisions have been made on that front.
“It’s something that, as part of global flexibility, we are looking at and continue to make some inquiries on, but nothing has been decided yet,” he said.
Malden’s head count stands at about 1,500, roughly the same level at the time of the Chapter 11 petition, Costello said. Over the year leading up to its filing, Malden cut about 100 jobs.
Still, that level is well below the 2,400 employee level the company had in 1995, when a fire destroyed its main plant and left its workers facing the possibility of a jobless Christmas. Buoyed by then-strong demand for the mill’s signature Polartec, president, chief executive and majority owner Aaron Feuerstein decided to rebuild the plant where it was, rather than move it to a lower-cost region, and keep all the workers on the payroll, while rebuilding the plant.
It was a magnanimous gesture that catapulted Feuerstein onto the national stage. But Malden’s fiscal condition has never been the same. While it was rebuilding, aggressive competitors, primarily from the Far East, swooped in and captured much of Malden’s market share. In its last fiscal year, ended October, Malden’s revenues were $220 million, down from $400 million at its peak in 1995.