Galey & Lord files reorganization plan; noteholders get warrants

By Carlise Newman

Chicago, Nov. 17 - Galey & Lord Inc. filed its reorganization plan in court, which indicated that senior secured debt holders will exchange $300 million in pre-petition secured debt for a combination of cash, a $130 million secured note and the equity of the reorganized parent company.

Holders of the company's $300 million subordinated senior notes will receive warrants to purchase common stock if their class votes to accept the plan.

A cash pool of $500,000 will be available for part of the claims of the companies' general unsecured creditors.

Equity holders will receive nothing.

The company expects to have in place exit financing of up to $70 million, of which $25 million would be drawn upon emergence.

In addition, Galey & Lord's $100 million debtor-in-possession financing has been extended to Feb. 15, 2004.

A hearing on the disclosure statement is set for Dec. 17. Galey & Lord expects the court to consider confirmation of the plan by the end of January 2004 and hopes to emerge from bankruptcy soon afterward.

Galey & Lord is a textile manufacturer in Greensboro, N.C.

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