EXHIBIT 99.1
GALEY & LORD FILES FOR REORGANIZATION; COMPANY TO CONTINUE
NORMAL OPERATIONS DURING CHAPTER 11; NO IMPACT ON CUSTOMERS
GREENSBORO, NC - February 19, 2002 - Galey & Lord, Inc.(OTC BB: GYLD) today
announced that it and its U.S. operating subsidiaries filed voluntary petitions
for relief under Chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court for the Southern District of New York. The Company said
that it elected to file for reorganization because it offered the most viable
way to restructure its balance sheet and access new working capital while
ensuring an uninterrupted flow of product to its customers.
Included in the filing are Galey & Lord Industries and Swift Textiles Inc. The
Company's international subsidiaries including Klopman International have not
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filed for reorganization and will not be affected.
The Company said that it has entered into a $100 million in debtor-in-possession
(DIP) financing agreement with its agent bank Wachovia. This significant
financing is designed to ensure that the Company can continue to supply its
customers with products in a continuous manner, as well as grow the business
according to its strategy and meet overall market demand.
Galey & Lord said that the poor environment in retail, exacerbated by the events
of September 11, created an economic climate that necessitated a restructuring
of the Company's debt.
"Over the past two years, Galey & Lord has taken a number of steps that have
reduced its costs and rationalized its production to the appropriate size. As
painful as these actions were, they are now complete, and the Company does not
contemplate any additional plant closures. We are now taking steps to resolve
our financial challenges," said Arthur Wiener, chairman and chief executive
officer of Galey & Lord. "When this action is successfully completed, the
Company will have a strong balance sheet that will enable it to pursue its
strategic goals."
The Company's operations will not be impacted by the reorganization; they will
continue to operate in the ordinary course of business. The Company said that it
expects to receive Court approval to pay employee wages, salaries and insurance
benefits in the normal course.
Galey & Lord is a leading global manufacturer of textiles for sportswear,
including cotton casuals, denim and corduroy, as well as a major international
manufacturer of workwear fabrics. The Company also sells dyed and printed
fabrics for use in home fashions.
This press release contains statements which constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Those statements include statements
regarding the intent, belief of current expectations of the Company and its
management team. Prospective investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements. Such risks and uncertainties
include, among other things, the ability of the Company to successfully emerge
from bankruptcy, the ability of the Company to operate successfully during the
reorganization proceeding, competitive and economic factors in the textile,
apparel and home furnishings markets, raw materials and other costs, the level
of the Company's indebtedness, interest rate fluctuations, weather-related
delays, general economic conditions, governmental legislation and regulatory
changes, the long-term implications of regional trade blocs and the effect of
quota phase- out and lowering of tariffs under the WTO trade regulations and
other risks and uncertainties that may be detailed, from time to time, in Galey
& Lord's reports filed with the Securities and Exchange Commission.
SOURCE: Galey & Lord, Inc.
CONTACT: Joel Weiden, +1-212-515-1970 for Galey & Lord, Inc.