Malden Mills' emergence from Chapter 11 bankruptcy has been postponed until Sept. 10, slowed down by paperwork. A Malden spokesman has confirmed to SNEWS that chief creditor General Electric Co. is extending Aaron Feuerstein's deadline for an additional 30 days to raise the original $92 million he needs to regain control of the company.
Originally, if Feuerstein did not have the funds by Aug. 26, when Malden was scheduled to emerge from reorganization under Chapter 11, the amount would have increased to $124 million. Andrew Schwartz, the attorney representing unsecured creditors, was looking to block Feuerstein's extension, but Malden's Nate Simmons confirmed that it has not happened.
In Feuerstein's latest round to raise funds, the board of directors of the Export-Import Bank of the United States (Ex-Im Bank) voted on Aug. 25 to approve a preliminary commitment for $20 million to support export sales of Malden's fabrics to the United Kingdom, France and Korea.
According to a statement from Ex-Im Bank, "The amount of the approved preliminary commitment was related to the size of the company's export-related inventory and receivables." Malden sells nearly half of its products to international clients.
Unfortunately, Feuerstein had originally hoped for $65 million to help persuade other lenders to back his effort, according to a Boston Globe article. Over time, the amount progressively went down: first to $50 million during a formal review process, then to $35 million before it dropped to the $20 million that was approved.
Simmons said, "It's a domino theory. One loan is dependent on the terms of the next loan, which is then dependent on an equity investor. It's all going to fall into place at one time or it's not. It could all happen tomorrow, or it could not happen at all. However, I would never bet against Aaron Feuerstein. He's a tenacious businessman."
Feuerstein plans to reapply to Ex-Im Bank for the additional $15 million based on other assets, as well as to court other potential investors.
"They've had banks, investors and venture capital companies, just a slew of people, coming through and evaluating and looking at the books and talking to management," Simmons said. "There are still a number of companies out there that could potentially play a role in the future of the company. There's no one company that I can really identify as someone they're holding out hopes for. There are multiple potential investors Aaron is continuing to work with and negotiate with in the hopes of coming up with the $92 million."