CROWN FILES FOR CHAPTER 11
Byline: Rich Wilner
NEW YORK — Crown Textile Co., the interlinings manufacturer that celebrated its 100-year anniversary last year, has filed a Chapter 11 petition seeking to reorganize.
At the same time, Crown said the company was up for sale and that it hoped the filing would expedite a deal.
Toward that end, the company reported that Richard Kenney, president and chief executive officer, had resigned and that Baker Smith, a turnaround specialist and a principal in the Atlanta office of Morris, Anderson & Associates Ltd., had been hired to fill both positions.
Crown said increases in raw material prices, which it couldn’t pass along to its customers, and the soft market for apparel led to a cash crunch that forced the filing, made in bankruptcy court in Chicago.
The firm produces a variety of interlinings. In apparel, they are used primarily in men’s suits, but also in women’s clothes as well.
In court papers, the company, which had sales of roughly $40 million in the year ended July 31, listed liabilities of $25.4 million, including $13.5 million unsecured, and assets of $26.1 million.
Crown, based in Talladega, Ala., said it has secured a debtor-in-possession financing facility with LaSalle National Bank and gotten court approval for interim financing pending a hearing Jan. 8.
The amount of the DIP facility was not available at press time.
Crown was sold in May 1993 by Richard Sheerr, a grandson of the company’s founder, to Chicago-based Heller Equity Capital Corp., now known as Heller Investments, and other investors for an undisclosed sum.
Largest unsecured creditors, according to court papers, include Uniblend Spinners, Union, S.C., owed $639,997; Huls America, Piscataway, N.J., $401,452; Glassmaster Co., Lexington, S.C., $243,417; RSM Co., Charlotte, N.C., $235,092, and Lintz Textile GmbH, Austria, $141,730.
Stephen T. Bobo, of D’Ancona & Pflaum, Chicago, represents Crown. The case has been assigned to Judge John Schwartz. — Fairchild News Service