Competing bid offered for Malden Mills
A private equity firm today made a competing bid for Malden Mills Industries Inc.
The bid is similar to the tentative deal the textile maker reached with another potential buyer before filing for bankruptcy protection.
Philadelphia-based Chyrsalis Capital Partners said it was offering the same $44 million price contained in a tentative purchase agreement Malden Mills reached with Boston-based Gordon Brothers Group.
That agreement is subject to the approval of the U.S. Bankruptcy Court in Delaware where Malden Mills on Wednesday filed for Chapter 11 protection. The move came just over three years after the privately held maker of Polartec fleece and other specialty fabrics emerged from an earlier bankruptcy filing.
The new bankruptcy gives potential bidders 45 days to submit offers to compete with the Gordon Brothers' agreement, which the company and Lawrence-based Malden Mills hope to complete by the end of next month.
Paul Halpern, a partner at Chrysalis, said his firm "has submitted a similar offer to the owners of Malden Mills and is looking forward to participating in the auction."
Chrysalis said in a statement that the company "is supportive of Malden Mills' current management team and operational plan." Chrysalis said its offer would treat Malden Mills' creditors identically to the Gordon Brothers offer, except it would not require payment of a break up fee from Malden Mills if it backs out of a purchase deal.
Chrysalis said it had submitted its bid to Malden Mills, but had not yet submitted it in court.
Spokesmen for Malden Mills and Gordon Brothers declined comment Friday on the Chrysalis bid.
Both Chrysalis and Gordon Brothers specialize in investing in troubled companies undergoing restructuring, including bankruptcies.
Malden Mills emerged from its earlier bankruptcy in 2003 with lenders in control of the company, ending three generations of leadership under the Feuerstein family. Aaron Feuerstein gained national renown for his decision to keep workers on payroll after the 1995 fire destroyed the company's main factory in Lawrence.
Malden Mills has struggled to overcome financial problems lingering from its prior bankruptcy while also competing against foreign textile makers with lower labor costs.
The company employs more than 800 workers at its plants in Lawrence and in Hudson, N.H. Its customers include Lands' End, The North Face, Patagonia and the Pentagon. (AP)
