Quaker Files Chapter 11

August 19, 2007  by in UnCategorized   

By Home Furnishings Business in Upholstery on August 2007 Quaker Fabric has filed a petition of Chapter 11 of the U.S. Bankruptcy Code. The company’s affiliates outside the United States were not included in the filing.

The fabric supplier said July 2 that it would likely liquidate its business and that such a sale would not generate sufficient funds to allow payment to holders of its common stock. The following week, Quaker hired a liquidation advisory company to consult on the sale of the company’s assets to yield the greatest return for creditors.

The process has been ongoing, with the company seeking bids from qualified buyers for the purchase of Quaker as a whole, as well as on each asset class, including machinery and equipment, raw material and finished goods inventory, accounts receivable, intellectual property and real estate.

During the Chapter 11 proceedings, the process will continue under court supervision. In addition, Quaker said it has reached an agreement for up to $165 million in new debtor-in-possession financing. Subject to court approval, this DIP financing will provide sufficient funding during the Chapter 11 process.

Quaker started its annual two-week planned shutdown on June 29 and did not have the financing needed to resume operations July 16, which would have marked the end of the shutdown period. Quaker terminated its 930 workers on July 2.