LAWRENCE, Mass. - Factory owner Aaron Feuerstein sought yesterday to delay a court deadline to buy back control of bankrupt Malden Mills Industries Inc. on favorable terms, though a representative for the company's unsecured creditors vowed to fight the proposal.
The legal skirmish is the latest in the struggle for control over Malden Mills and its 1,200 jobs. The company is scheduled to emerge from bankruptcy Sept. 10, and under the terms of its reorganization plan Feuerstein needs to raise at least $92 million to buy back the majority of the company once owned by his family.
Feuerstein had faced a deadline yesterday to come up with the money and regain the maker of Polartec fleece. If he missed the deadline, the terms would rise to $124 million until Aug. 26, 2004, and he would retain just a fraction of the company's equity and the position of company chairman.
In their filing yesterday, Feuerstein's attorneys sought to extend his buyback right to Sept. 10, or later if the company's emergence from bankruptcy is pushed back again. The company noted the lead creditor in the case, General Electric Co., said Monday that it was willing to accept a 30-day extension.
But Andrew Z. Schwartz, a Foley, Hoag attorney representing unsecured creditors, said in a telephone interview yesterday that "we intend to vigorously oppose this request."
While new officers of the company might still accept a later offer from Feuerstein to buy back Malden Mills, Schwartz said, Feuerstein would no longer have the right do to so.
In any case, the plan couldn't be changed because creditors had already voted on the original version, Schwartz said, and acted upon the results.
Feuerstein says he has assembled sufficient backing to buy back the company if he also receives a $35 million guarantee from the U.S. Export-Import Bank in Washington, which is designed to boost U.S. exports.
On Monday, the bank voted to grant just $20 million in aid, but Feuerstein says he intends to reapply for the rest based on other assets.