The world’s 18th largest roll goods producer Foss Manufacturing Company, Hampton, NH, has filed a petition for relief under Chapter 11 of the U.S. Bankruptcy Code. In conjunction with the bankruptcy petition, Foss has filed a request that the court approve the use of cash collateral to provide working capital for its operations. Foss’ manufacturing facility will remain in operation during Chapter 11, and the company anticipates no employee layoffs or customer disruptions as a result of the filing.
However, one key personnel change is the resignation of Stephen Foss, the company’s longtime chairman, president and CEO. According to court papers, Foss Manufacturing was pushed into bankruptcy after accusations of fraud led its chief lender to tighten its cash flow. One creditor accused Stephen Foss of providing misleading financial information.
According to Foss Manufacturing, the immediate need for the bankruptcy petition was driven by the refusal of the company’s senior lender, CapitalSource Finance LLC, to continue to fund the company’s day-today operations and the inability of the company and CapitalSource to negotiate mutually agreeable terms to fund the company’s restructuring plan activities.
The news comes on the heels of the launch of Foss’ southeast regional office in Charlotte, NC, which was added to better serve the company’s growing clientele in the specialty fabric, upholstery and furniture industries. The new office is headed by Jeff Dellinger, managing director of Foss’ Performance Fibers business unit.