Quaker Fabric Corp., the Fall River furniture- upholstery manufacturer that filed under Chapter 11 last August and sold almost all the assets six weeks later, is in bankruptcy court today aiming for approval of a disclosure statement explaining the amended plan.
The plan, originally filed in May, was modified to incorporate a settlement with 850 workers who were fired without what they claim was the 60-days' notice required in federal law.
The new plan would give the former employees, whose claims they say total $6 million, a recovery of between 5 percent and 15 percent.
Unsecured creditors with claims totaling $25 million are projected to see a 6 percent recovery. Previous versions of the disclosure statement pegged their dividend at 10 percent.
If the bankruptcy court approves the disclosure statement, creditors may vote on the plan in advance of a confirmation hearing, where the bankruptcy judges looks at any objections and decides if the plan complies with law.
The disclosure statement says secured claims have been fully paid. Creditors will be paid by a liquidating agent from available cash after the plan is approved.
Quaker sold most of the assets for $27 million to Gordon Brothers Group.
The petition by the Fall River showed assets of $155.2 million against $60.4 million in debt, including $32.7 million owed to secured creditors. Quaker halted operations in July 2007 before the Chapter 11 filing. The company blamed the filing on competition from Asia.
The case is In re Quaker Fabric Corp., 07-11146, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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Ask former director-level types and you'll find that China may not have been their biggest worry. The reality is that trends in leather and, especially, microfibre caught these bozos off-guard. China is a convenient excuse.
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