FORSTMANN GETS COURT’S OK TO SELL CLAIM AGAINST PLAID
NEW YORK — Forstmann & Co. Inc. received bankruptcy court approval Thursday to sell its $696,000 claim against Plaid Clothing Group Inc. in the open market.
Forstmann, a manufacturer of worsted and woolen fabrics, and Plaid, a men’s tailored clothing maker, filed for bankruptcy protection this year. Lena Mandel, of Debevoise & Plimpton, counsel to Forstmann, said the company expects to sell the claim for about $160,000, or 23 cents on the dollar.
Mandel told Bankruptcy Judge James Garrity Jr. that Forstmann has had discussions with potential buyers, but none had been willing to make a firm offer until Forstmann was ready to sell its claim.
Proceeds from the sale of the claim will go directly to General Electric Capital Corp., which is providing Forstmann’s $85 million debtor-in-possession facility, Mandel said.
During Thursday’s hearing, Forstmann also received court approval to retain the services of turnaround specialists Jay Alix & Associates. Robert Dangremond, who assumed the title of chief executive officer of Forstmann in August, is a principal at Jay Alix. — Fairchild News Service