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Liberty Fibers Files For Bankruptcy

October 3, 2005

Rayon staple fiber producer Liberty Fibers Corporation, Lowland, TN, has closed its Lowland plant and filed for Chapter 11 protection with the U.S. Bankruptcy Court. The operation was previously known as the Lenzing Fibers plant of former parent company Lenzing AG of Austria.

According to a statement from the company, Liberty has ceased all activities related to rayon fiber production and employees have been laid off for an indefinite period, except for a small staff that will be retained to conduct clean-up, sell the remaining inventories, secure the fixed assets and monitor environmental operations on the site.

The company attributed the closure to increased competition over the past six months in the global rayon fiber market, resulting in a sharp increase in imports of rayon fiber from Asia and Europe into the North American market. The resulting loss of sales to its largest customers, in addition to the decline of sales margins, reportedly made it impossible for Liberty to cover its operating costs. In the weeks ahead, Liberty plans to evaluate strategic options for the business based on the forecasted future of the rayon fiber market in North America.

End products using rayon include medical disposable, personal care, and feminine hygiene items, baby wipes, industrial and home furnishings and apparel.

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