Delta Mills exits Chapter 11 bankruptcy

By Caroline Salls

Pittsburgh, Oct. 23 - Delta Mills, Inc. emerged from Chapter 11 bankruptcy Tuesday, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the company's plan of liquidation was confirmed on Oct. 10.

On the plan effective date, parent Delta Woodside Industries, Inc. and debtor Delta Mills Marketing, Inc. were merged into Delta Mills.

Following its failure to obtain bids in the proposed sale of substantially all of its assets, Delta Mills decided to wind down its business and sell its inventory.

Treatment of creditors under the plan will include:

• Holders of administrative claims will be paid in full in cash;

• Holders of GMAC debtor-in-possession facility claims will be paid in full in cash;

• Holders of general secured claims will receive either payment in full in cash or return of the collateral securing the claim, at the company's option;

• Holders of priority claims will be paid in full in cash;

• Holders of reclamation claims will either receive return of the goods that are the subject of the claim, cash, or a combination of goods and cash;

• Holders of convenience claims will recover about 18% in cash;

• Holders of general unsecured claims will receive their share of the company's assets after all administrative, priority, GMAC, secured, reclamation and convenience claims are paid in full; and

• Equity interests will be canceled, and holders will receive no distribution under the plan.

The reorganized Delta Mills will be overseen by current officers William F. Garrett, William H. Hardman Jr., Donald C. Walker and chief designated officer Leon Szlezinger.

Delta Mills is the operating subsidiary of Delta Woodside, Inc., a Greenville, S.C.-based company that manufactures and sells textile products for the apparel industry. Delta Mills filed for bankruptcy on Oct. 13, 2006. The Chapter 11 case number is 06-11144.

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