Pillowtex Files Chapter 11 Bankruptcy Petition

Pillowtex Corporation has filed a voluntary petition in the U.S. Bankruptcy Court in Wilmington, Del., seeking relief under Chapter 11 of the U.S. Bankruptcy Code, and will sell all of its plants, equipment and brands subject to court approval under Section 363 of the Bankruptcy Code. This is the second such filing for the company in less than three years. According to analysts, intense foreign competition and decreased consumer demand has resulted in a downturn that has decimated the textiles industry.

Pillowtex emerged from its first bankruptcy filing in May 2002, but faced continued financial trouble. Earlier this year, Pillowtex executives put the company up for sale to try to avoid bankruptcy, but in the end were unable to avert the July 30, 2004 filing.

As detailed in the bankruptcy filing, Pillowtex will continue to own its assets as a "debtor in possession." During the bidding process, the company will not operate its manufacturing facilities and will utilize available inventory to service its existing customer business, and will conduct going-out-of-business sales at its Fieldcrest Cannon Stores.

For more information, go to: http://www.pillowtex.com