LINWOOD, Pa. (Jan. 3) — Foamex International Inc. has filed a Chapter 11 proposed plan of reorganization with the U.S. Bankruptcy Court in Delaware and said, subject to the plan´s approval, it expects to emerge from Chapter 11 later this spring.
Foamex said Dec. 23 it had agreed in principle in September with holders of a majority in amount of senior secured notes on the key terms of a proposed restructuring to restore the financial health of the company. As part of this process, Foamex said, it voluntarily filed for Chapter 11 protection to allow the company "to expedite and complete its restructuring while operating without disruption."
"Today´s filing of the plan is a key step in the restructuring process and moves us closer to our goal of emerging as a financially stronger company and solidifying our position as the leading supplier of polyurethane foam solutions," said Tom Chorman, president and CEO of Foamex. Chorman also acknowledged the hard work and dedication of the group´s employees and the support of customers and suppliers.
Under the proposed plan, which is subject to creditor acceptance and confirmation by the Bankruptcy Court, Foamex said its financial restructuring "will be primarily achieved through a debt-for-equity conversion resulting in the reduction of approximately $500 million of total indebtedness from pre-petition amounts." In addition, Foamex´s existing common stock it to be canceled and no distribution will be available for current shareholders.
No plans to make any changes to the group´s business units were revealed.