Gulistan Carpet Files For Chapter 11
The company has been producing carpet under the Gulistan name since 1924, although it traces its roots back to 1818, when an Armenian textile importer established a business in Turkey. The company began manufacturing carpet in Aberdeen in 1957, and was acquired by J.P. Stevens & Co. Inc. in 1964. Over the last 25 years, Gulistan Carpet has undergone several ownership changes. In addition to its headquarters and manufacturing operations in Aberdeen, the company has a plant in Wagram, N.C.
Gulistan has been impacted by a slowdown in the residential carpet market resulting from an extended downturn in the housing industry. According to company management, Gulistan "has been making substantial efforts over the past few years to restructure its debts or to restructure its business and continue to operate. The company has engaged in discussions and negotiations with a private equity group and other companies in the industry in an attempt to sell Gulistan's assets as a going concern. None of these efforts have proved successful to date."
Bank of America will provide Gulistan with a debtor-in-possession credit facility to improve liquidity and provide working capital, and Gulistan has stated it believes it has sufficient liquidity to operate during Chapter 11 and to continue providing goods and services to its customers.
"Chapter 11 gives us the best opportunities to maximize the value of the Gulistan business and its assets," said Phillip Essig, CEO, Gulistan. "The Board of Directors, the senior management team and I would like to express our appreciation for the hard work and loyalty of our employees. We also want to thank our customers for their continued support and loyalty."
If Gulistan is unable to find a buyer, approximately 395 full-time employees will be terminated over the next four months. Specific closure dates have yet to be determined, as different company operations would cease at different times, management said.
January 8, 2013