Galey & Lord Files Chapter 11 To Facilitate Acquisition
In order to facilitate its planned acquisition by New York City-based investment firm Patriarch
Partners LLC, Atlanta-based apparel fabric manufacturer Galey & Lord Inc. has filed for Chapter
11 bankruptcy protection.
Galey & Lord had emerged from previous Chapter 11 protection in March 2004 (See TW News, March 2004). In late July, Patriarch, already a stakeholder in the company, made an acquisition offer that subsequently failed to receive the unanimous approval of Galey & Lord's term lenders. The new filing will allow the acquisition to proceed, subject to Bankruptcy Court approval and other acquisition offers.
Patriarch's agreement is worth $188 million that would be used to pay, replace or assume outstanding debt and letters of credit; as well as employee pay and benefit, tax, trade and utility obligations.
Galey & Lord also has secured an $80 million financing agreement with GE Capital to provide working capital for its normal business operations.
"[W]e are confident that this course will allow us to continue on a positive track and give us the means of achieving our long-term goals," said John J. Heldrich, president and CEO, Galey & Lord. "As this process unfolds, we will continue to work to preserve jobs, protect value and provide the highest level of service to our customers," he said. "We expect business to continue as usual, with little, if any, impact on our employees, partners or business operations. Patriarch believes in these same responsible business practices. "