NEW YORK — Another major U.S. textile mill has seen the light at the end of the bankruptcy tunnel.
Galey & Lord Inc. on Friday filed its reorganization plan and disclosure agreement with the U.S. Bankruptcy Court in Manhattan, one day short of the 21-month mark since its filing. The plan calls for the khaki and denim mill, with headquarters in New York and offices in Greensboro, N.C., to emerge from Chapter 11 protection by Feb. 15, with its creditors as its new owners.
“This is an important step for our company and we are grateful to our many loyal customers, vendors and employees for the support they have given us,” chairman and chief executive officer Arthur Wiener said in a statement released Monday. “The plan allows us to successfully deleverage our balance sheet.”
Under the terms of the plan, which is still subject to final approvals, the holders of Galey’s $300 million in secured debt would exchange their notes for cash, a $130 million secured note and equity in the new company.
The plan includes a proposal for Galey to sell its European Klopman International business.
According to the disclosure statement, for the fiscal year ended last month, the company’s preliminary results show net sales of $439.1 million and a $133.3 million net loss. Following its emergence, Galey’s stock would be canceled and it will cease to report financial results to the Securities and Exchange Commission.
Galey filed during a five-month wave of bankruptcies that included Burlington Industries, Malden Mills and Guilford Mills. Those three companies have since returned to solvency.