FALL RIVER – Quaker Fabric Corp. (Nasdaq: QFAB) today announced that it and subsidiary Quaker Fabric Corp. of Fall River have filed voluntary petitions for Chapter 11 bankruptcy protection.
The filings, made in the U.S. Bankruptcy Court for the District of Delaware, do not include Quaker’s affiliates abroad.
The company also said it has reached an agreement for up to $1.65 million in debtor-in-possession financing, which it expects to provide sufficient funding for the Chapter 11 process.
The company announced its intent to begin an orderly liquidation of its business early last month. (READ MORE) It said at the time, and reiterated today, that the sale of assets would not yield sufficient funds to allow it to make any payment to holders of its common stock.
A week later, on July 9, it retained “an experienced liquidation advisory firm to consult with management on the liquidation … in a manner intended to yield the greatest return to the Company’s creditors,” Quaker said in its announcement today.
“This process has been ongoing, with the Company seeking bids from qualified buyers for the purchase of the Company as a whole as well as on each asset class, including machinery and equipment, raw material and finished goods inventory, accounts receivable, intellectual property and real estate,” the company said. “During the Chapter 11 proceedings, this process will continue under court supervision.”
The company closed June 29, for its annual two-week vacation, and never reopened.
“Sustantially all of the company’s 930 employees were terminated” on July 2, Quaker said, after the company determined it did not have the financing to resume operations at the end of the annual shutdown on July 16.
Before its closure, Quaker was the world’s largest producer of Jacquard-weave upholstery fabrics for the U.S. and global furniture markets.
In the PBN’s 2007 Book of Lists, it ranked eighth among local manufacturer, along with Sensata Technologies of Attleboro, with 1,000 employees apiece.
