Under a reorganization plan Malden Mills filed with the courts, Aaron Feuerstein may have to step down as the company's chief executive officer and relinquish control to a group of creditors led by the finance arm of General Electric Co.
According to court documents, Feuerstein is scheduled to step down as chief executive officer when the company emerges from Chapter 11 bankruptcy (likely in May) unless he can secure $92 million to satisfy claims by creditors and lenders before then. If Feuerstein can raise the money, he can exercise an exclusive option in the reorganization plan to regain control of the company.
Should Feuerstein fail to raise the money before Malden emerges from Chapter 11, he would give up the CEO title, but would remain president and chairman and continue to draw a paycheck under a five-year employment agreement. In addition, the plan allows that Feuerstein will still have until July 30 to raise the $92 million and regain control of the company at a set price.
After July 30, Feuerstein will have another three years to exercise his exclusive option to regain control at yet another established price.
Malden Mills spokesperson David Costello told SNEWS that Feuerstein has already raised more than 50 percent of the $92 million.
SNEWS View: Malden is clearly hoping Feuerstein can retain control. His hand will undoubtedly be softer and more compassionate toward employees and programs than a bottom-line focused financial group. Our view is that no matter who assumes control, and we are certainly rooting for Feuerstein on a human and emotional level, Malden will continue to fire on all cylinders turning out innovative fabrics and blends.