Foamex files Chapter 11 plan

By Liz White, UT staffLinwood, Pennsylvania-Foamex International Inc. has filed a proposed plan of reorganisation with the US Bankruptcy Court in Delaware and said, subject to the plan's approval, it expects to emerge from chapter 11 in spring 2006. Foamex said in a 23 Dec statement that it reached agreed in principle in Sept 2005 with holders of a majority in amount of senior secured notes on the key terms of a proposed restructuring to restore the financial health of the company. As part of this process, Foamex said, it voluntarily filed for chapter 11 protection, to allow the company "to expedite and complete its restructuring while operating without disruption."Today's filing of the plan is a key step in the restructuring process and moves us closer to our goal of emerging as a financially stronger company and solidifying our position as the leading supplier of polyurethane foam solutions, said Tom Chorman, president and chief executive officer of Foamex. Chorman also acknowledged the hard work and dedication of the group's employees and the support of customers and suppliers. Under the proposed plan, which is subject to creditor acceptance and confirmation by the Bankruptcy Court, Foamex said its financial restructuring "will be primarily achieved through a debt-for-equity conversion resulting in the reduction of approximately $500 million of total indebtedness from pre-petition amounts." In addition, Foamex's existing common stock it to be cancelled and no distribution will be available for current shareholders. No plans to make any changes to the group's business units were revealed. "