Galey & Lord asks court to convert its case to Chapter 7

By Jeff Pines

Washington, Nov. 10 - Galey & Lord Inc. asked the U.S. Bankruptcy Court for the Northern District of Georgia to convert its case to a Chapter 7 liquidation from Chapter 11.

Patriarch Partners closed the acquisition of the Atlanta-based textile firm's assets on Tuesday. The company no longer has any employees.

Patriarch, which manages $4 billion, will pay off all of Galey & Lord's term debt, pay off, replace or assume up to $85 million in secured debt plus outstanding letters of credit and assume $58 million in employee pay and benefits as well as trade, utility and tax obligations.

Galey & Lord and Patriarch Partners agreed to an out-of-court acquisition deal in July, but not all of the company's term lenders would give their approval, which was needed to go forward; so, Galey & Lord filed for Chapter 11.

The company filed for bankruptcy on Aug. 19. Its Chapter 11 case number is 04-43098.

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