MEDIA, Pa.–Foamex International has filed for Chapter 11 bankruptcy protection at the U.S. bankruptcy court in Wilmington, Del.
Jack Johnson, president and chief executive officer, said in a company statement issued yesterday that the company has been hit hard by the economic downturn. Johnson also said the company can’t support its existing debt load (the company’s total debt, according to the Chapter 11 filing, is $379.7 million, against total assets of $363.8 million) in the current business climate, even though Foamex has slimmed its debt by about $240 million to $380 million over the past two years.
“The Chapter 11 process will allow Foamex to gain immediate liquidity and continue operating without interruption, while giving us the opportunity we need to restructure our balance sheet, strengthen our business performance and create long-term value,” Johnson said. Foamex has also filed for approval from the bankruptcy court for debtor-in-possession financing of up to $95 million from MatlinPatterson Global Advisers and Bank of America.
According to the filing, Foamex’s sales for the four fiscal quarters ending on Sept. 28, 2008 were $980 million. At the top of the list of unsecured creditors are Dow Chemical at $18.1 million, Milliken & Co. at $2.9 million and Bayer Corp. at $1.4 million.