Malden Mills unsecured creditors committee asks court to terminate exclusivity

By Caroline Salls

Pittsburgh, March 23 - Malden Mills Industries, Inc.'s official committee of unsecured creditors asked the U.S. Bankruptcy Court for the District of Massachusetts to terminate the company's exclusivity to file a plan of reorganization and solicit votes on the plan, according to a Friday court filing.

According to the motion, the committee entered into a settlement with Malden Mills' debtor-in-possession facility lenders that requires the company's exclusivity periods be terminated.

The committee said Malden Mills' case is not complex, the company has no intention of filing a plan since it has requested conversion to Chapter 7 bankruptcy, and the company has made no progress in negotiations with unsecured creditors.

If exclusivity is terminated, the committee said it will be in a position to carry out the expressed will of general unsecured creditors of these estates - to file a Chapter 11 creditors' plan that implements the settlement with DIP lender GE Capital and gives creditors some continuing oversight in Chapter 11 "to ensure the limited funds available to them are not squandered."

Malden Mills, a Lawrence, Mass.-based textile company, filed for bankruptcy on Jan. 10 in the U.S. Bankruptcy Court for the District of Delaware. The case was transferred to the Massachusetts court on Jan. 16. Its Chapter 11 case number is 07-40124.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.