Bankrupt Foss Manufacturing could be sold for $39 million to Foss Manufacturing LLC, a Nevada limited liability company, according to published reports. Trustee Patrick O’Malley, who has run the company during its bankruptcy proceedings, filed documents asking for the bankruptcy judge to approve the purchase agreement. A hearing on the matter is scheduled for April 28.
The sale, if approved, provides for continuation of the company, which manufactures nonwoven fabrics and synthetic fibers, and the continued employment of 355 workers. Foss Manufacturing LLC would purchase all the company’s assets except for the securities of Foss Manufacturing Europe.
The proposal also pays off all secured claims, administrative expenses and $300,000 in cash to wind down operations, according to court documents.
Foss Manufacturing filed for bankruptcy last September after its chief lender, CapitalSource, cut off credit, alleging the company fraudulently borrowed millions of dollars to benefit itself and company insiders.
According to the bankruptcy filing, the company estimated assets of $10 million to $50 million and estimated debts in the same range.
With facilities in North America, Asia and Australia, Foss is a significant supplier to the automotive technical, decorative, fibers and retail industries worldwide.