Court approves Dan River's Chapter 11 reorganization proposal
Staff -- Kids Today, 2/1/2005 12:00:00 AM
Danville, Va. —
A U.S. Bankruptcy Court has approved textile manufacturer Dan River's reorganization plan, which is expected to become effective Feb. 10.
Dan River filed for Chapter 11 reorganization on March 31, 2004, and has since closed four manufacturing facilities, reduced staff, and entered into court-approved agreements for the sale of its engineered products division and other assets which it believes are no longer necessary.
The reorganization plan says that Dan River will have indebtedness of approximately $90 million, down from more than $270 million when the bankruptcy cases were filed last March. All of the company's current common stock will be canceled and new common stock will be issued to certain post-emergence lenders and to its unsecured pre-petition creditors. The plan states that current stockholders will receive no recovery.
"During the bankruptcy proceedings, we have restructured the company both organizationally and financially to meet the challenges of today's global textile competition," said Joseph L. Lanier Jr., currently chairman and CEO, who will become non-executive chairman of the board upon emergence from bankruptcy. "We have been confronted with many difficult and painful decisions during this time. These have been made based on what outcome would best position Dan River to succeed in the future."
Barry F. Shea, currently executive vice president and chief financial officer, will become president and CEO upon emergence from bankruptcy.
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