NEW YORK — A Georgia bankruptcy court is set to rule today on fabric maker Dan River Inc.’s plan to emerge from Chapter 11 proceedings.
The company filed in Georgia’s northern district in March, citing the need to cut its $157 million debt load, which had a heavy 14 percent interest rate. According to court papers, the firm has lined up $135 million in new financing to pave the way for its emergence.
The Danville, Va.-based company laid off almost 700 people over the past nine months, cutting its head count to about 4,100. According to court papers, upon emerging from protection, Dan River chairman and chief executive officer Joseph Lanier will hand over the ceo role to Barry Shea, who currently serves as Dan River’s chief financial officer.
“We have the goal line in sight,” said Shea in a statement. “With the significant distraction of the bankruptcy behind us, we will be able to focus with renewed intensity on our number one priority — the needs of our home fashions and apparel fabrics customers.”
Shea could not be reached Monday for further comment.
Last month, Dan River agreed to sell its Engineered Products division, which makes fabrics used in high-pressure industrial hoses, to an affiliate of Industrial Specialty Fabrics Inc. in a $9.4 million deal.
Through the nine-month period ended Oct. 2, Dan River posted $336.3 million in sales, an 8.5 percent decline from the prior year. Its apparel fabrics sales came to $80.4 million. The mill recorded a $72.7 million net loss, compared with a $120.2 million loss a year earlier.
The company said that James Martin will continue as president of its apparel fabrics division. In addition, Daniel Hammer will serve as executive vice president of home fashions sales and marketing, Greg Boozer will serve as executive vice president of manufacturing, Scott Batson will be named senior vice president and chief financial officer and Harry Goodrich will serve as vice president and general counsel.
The post-bankruptcy financing includes a $110 million revolving credit facility from Ableco Finance LLC and another term loan of $25 million from a group of backers.