Media, Pennsylvania - Bloomberg has reported (22 May) that Major US foamer Foamex International Inc., which went into Chapter 11 bankruptcy protection in February, has been ordered to restart an auction for its assets after the outcome was challenged by lenders owed $325 million.
Wayzata Capital Investment Partners llc won the first auction with a bid of $141.5 million.
Other bidders include MatlinPatterson Global Opportunities Partners III lp, which had made an offer, 25 March, to buy substantially all of the polyurethane foam group's assets. At that time, according to Foamex, MatlinPatterson would purchase Foamex's assets as a going concern, "assuming the group's ongoing obligations to Foamex's customers and vendors and the continued employment of its employees."
MatlinPatterson, along with Bank of America, was also funding Media-headquartered Foamex's $95 million borrowing as a debtor in possession, under the Chaptr 11 terms.
Meanwhile, Crain publication Pensions & Investments has reported that the Pension Benefit Guaranty Corp. (PBGC) has taken over the defined benefit pension plan of Foamex LP. Foamex's asset sale does not include the pension plan, according to a news release from PBGC.
The Foamex plan, which covers about 5500 employees and retirees, is about 48 percent funded with assets of $74 million to cover liabilities of $153 million. PBGC expects to cover $76 million of the $79 million shortfall, the news release said.
The Foamex plan was frozen as of 31 Dec 2007, for all participants except some hourly workers at company plants in Eddystone, Pennsylvania, and Tupelo, Mississippi, the PBGC news release said.