A leaner Foamex International Inc. and its primary operating subsidiary have emerged from Chapter 11 bankruptcy protection with a new president and a pledge to pay off creditors.
The two businesses, which produce flexible polyurethane foam products, left the U.S. Bankruptcy Court for the District of Delaware Feb. 12 with approval to proceed with their reorganization plan, a company spokeswoman said.
Helping to head up that effort will be Gregory J. Christian, who was named president of the Linwood-headquartered company. Christian joined the firm in 1996 and had been serving as executive vice president, chief restructuring officer, chief administrative officer and general counsel. He also will remain a member of the board of directors.
Foamex International will conduct a $150 million rights offering to existing common and preferred shareholders as part of the pact, the firm said.
Separately, subsidiary Foamex L.P. received $790 million of exit financing from a group of lenders led by Bank of America N.A. and Banc of America Securities L.L.C. It expects to use about $615 million to begin paying off creditors, the company indicated.
The firms' approved plan of reorganization is the second filed by the businesses, which entered bankruptcy protection in September 2005. The first plan was rejected by creditors. In late January, Foamex's equity holders voted unanimously to accept the firm's second amended plan of reorganization.
New directors of Foamex International are Robert Burke, founder and CEO of Par IV Capital Management L.L.C.; Seth Charnow of the D.E. Shaw Group; and Eugene Davis, chairman and CEO of Pirinate Consulting Group L.L.C.
Remaining as directors are Raymond Mabus Jr., chairman and CEO; Christian; and Thomas Hudgins, retired partner, Ernst & Young L.L.P.
Mabus said the emergence from bankruptcy protection was the beginning of a new era. The firm is emerging as a stronger, leaner company, he said, and it has the financial flexibility needed to compete and be an industry leader.
``Central to our turnaround has been our efforts to transform the business from a traditional foam manufacturer to a market-focused provider of polyurethane foam-based solutions and specialty comfort products,'' he said. ``Innovation is the cornerstone of our future.''