Advanced Glassfiber Yarns LLC has won a 120-day extension to the company“s sole right to file a reorganization plan and solicit creditor support as it works to come out of Chapter 11 bankruptcy.
Th…
Advanced Glassfiber Yarns LLC has won a 120-day extension to the company“s sole right to file a reorganization plan and solicit creditor support as it works to come out of Chapter 11 bankruptcy. The ruling by the U.S. Bankruptcy Court in Wilmington, Delaware, extends the deadline for filing a plan until 7 August 2003 to file a plan and until 6 October 2003 to lobby for creditor support. Had the bankruptcy court rejected the company“s request, the exclusive period to file a plan would have ended 9 April 2003 and the exclusive lobbying period would have finished 9 June 2003. Under the Bankruptcy Code, companies in Chapter 11 must file a reorganization plan with the court, outlining how creditors will be paid. According to court papers, Advanced Glassfiber said it has been working to develop a reorganization plan with its lenders and an informal committee of noteholders but the number of issues the company faces has obliged it to seek an extension in order to “further refine plan scenarios and to continue negotiations.” Court papers also showed that Advanced Glassfiber has tried to stabilize its operations since it filed for Chapter 11 on 10 December 2002, and has taken steps to work with suppliers and customers. The company has also taken steps to ensure that it has made timely submissions to the court regarding its financial state. Advanced Glassfiber manufactures and supplies glass yarns to Latin America, Asia, Canada, Europe and the U.S. A significant global economic downturn and inventory correction in the electronics market forced the company to seek Chapter 11 protection from its creditors. A rise in international competition also led to a substantial fall in sales and operating income during the company“s 2001 fiscal year, court papers said. Sales fell by about 26% and operating income dropped by about 55% from fiscal years 2000 to 2001. Although the Jefferson Holdings unit of Owens Corning owns 49% of Advanced Glassfiber, the Advanced Glassfiber bankruptcy case will not be jointly administered with the bankruptcy cases of either company, and asbestos-related claims are not involved, according to the company“s bankruptcy petition. Advanced Glassfiber listed total assets of USD 194.1 million and total debts of USD 409 million as of 31 October 2002, when it filed for Chapter 11. When the company filed for bankruptcy, it employed 1,205 people. Since then, it has laid off 350 workers at three manufacturing plants, in Aiken, South Carolina, South Hill, Virginia, and Huntingdon, Pennsylvania, court papers said.