NEW YORK — The Leslie Fay Cos., locked in battle with the ILGWU, said operating results for the four months ended April 30 ran “a little behind” projections in its three-year business plan and that it might have to “fine tune” the plan down the road.
As a result, Leslie Fay, operating in Chapter 11 since April 1993, is asking for a six-month extension of its exclusivity period, to Dec. 16, under which only it can file a plan of reorganization, according to papers filed in bankruptcy court here.
A spokesman for Leslie Fay said the below-plan operating results were not unexpected as the company geared up for a possible strike by the ILGWU. The union, which failed to reach an agreement with the women’s apparel manufacturer, went on strike at midnight May 31, the main issue being Leslie Fay’s proposal to shut down its U.S. production.
So far, Leslie Fay’s business plan, the basis for its reorganization plan, has seen mixed results, court paper say, with operations in April falling off considerably after topping plan in the three months ended April 2.
As reported, Leslie Fay posted an operating profit of $2.7 million in the quarter ended April 2 against a year-earlier operating loss of $182,000. After reorganization, interest and financing costs and taxes, the firm had a net loss of $1.44 million in the quarter. A year ago, the net loss totaled $4.3 million. April results have not been specified.
The company said it has just begun to evaluate its own performance under the plan, noting that an accurate assessment will have to wait until Dec. 31.
Leslie Fay’s spokesman noted that although the company was below plan for the first four months, these early results are “not indicative of future performance,” and instead might be a “one-month aberration.”
In its court filings, Leslie Fay asked Bankruptcy Judge Tina L. Brozman for additional time to file a plan in order to better evaluate the performance of its business plan and the potential effects of its negotiations with the ILGWU.
In court papers, Leslie Fay predicted the results of its talks with the ILGWU “will have significant consequences for Leslie Fay’s operations, and specifically its production costs, and will thereby directly impact upon the business plan.”
If the extension is approved, it would be Leslie Fay’s fourth since filing for Chapter 11.
Brozman will hear arguments on the motion on June 14.