Media, Pennsylvania - Foamex International Inc. which has just gone into chapter 11 bankruptcy protection in the US, has been given court permission for debtor-in-possession (DIP) funding amongst other aspects needed for its reorganisation.
The court approval will allow Foamex to:
• Utilise up to $20 million of its $95 million DIP financing. A 16 March court hearing has been set for approval for the full amount of the DIP funds.
• Pay wages, reimbursements, health care coverage, and similar benefits;
• Continue customer practices and programmes; and
• Ensure continuation of its cash management systems and other business operations.
"Receiving interim approval of the DIP financing greatly enhances our liquidity position at the outset of this process," said Jack Johnson, Foamex's president and chief executive officer, in a 24 Feb statement.
Johnson said that, combined with revenues from ongoing operations, the initial DIP financing and other approvals will allow Foamex "to continue business as usual and remain focused on meeting the needs of our customers while we restructure our debt."