Textile firm’s bankruptcy protection extended
By AARON NICODEMUS, Standard-Times staff writer
Reprinted from the Standard-Times, September 12, 2006
NEW BEDFORD — A small textile company in the city’s South End has staved off a shutdown — at least until November — thanks to the intervention of the city and Mayor Scott W. Lang.
Since 1982, NuTex Industries Inc., located in the former Furniture City mill on West Rodney French Boulevard, has manufactured woven textiles used to make belts and suspenders, as well as webbing products that have military and medical uses.
The company employed 75 workers eight years ago, but is down to 38 as overseas competition took a substantial portion of its business. When the company’s debts totaled $1.2 million in May, NuTex filed for Chapter 11 bankruptcy.
NuTex president Andrei Klein said the company’s primary lender, Citizens Bank of Rhode Island, called on the U.S. Bankruptcy Court in Boston to liquidate the company last week. And Mr. Klein believed it was Mayor Lang, testifying on the company’s behalf before the bankruptcy court in Boston, that swayed Bankruptcy Judge William C. Hillman’s decision to grant the company another two months in bankruptcy protection.
“I cannot measure the magnitude of his impact on our well-being,” Mr. Klein said. “Without the mayor, I think we would have been out of business last week.”
The company’s bankruptcy attorney, Timothy Mauser of Mauser & Mauser of Boston, said in his 18 years as a bankruptcy attorney, he had never seen a political figure testify on behalf of a struggling company.
Mayor Lang said he got involved to save 38 jobs in the city, and because he believed that the company had a viable plan to turn itself around.
“I believe it’s a business with a potential to grow, and I wanted to do everything possible to advocate for it,” he said.
Mayor Lang also got the New Bedford Economic Development Council involved, as well as U.S. Rep. Barney Frank. While neither the city nor the EDC has provided the company with any financial support, the city will consider granting the company a tax increment financing deal and will work with other economic development agencies on funding.
The EDC actually turned the company down for a low-interest loan last year because the company’s finances at that time were too shaky, according to EDC interim executive director Matthew A. Morrissey.
Mayor Lang said he felt the company had “a new look and a new attitude” since then, but did not promise that the EDC would give a low-interest loan to NuTex.
Six years ago, the EDC loaned $500,000 to Cliftex Corp., a major men’s clothing manufacturer that had financial troubles. Cliftex stayed open for six more months after receiving the loan, paid the city back, and then closed its doors for good.
NuTex’s business used to center on woven belts and suspenders for the fashion industry, and it still holds the contract to manufacture all of the Boy Scouts of America belts nationwide. Last year, though, overseas competition had eaten away so much of its fashion business that NuTex had to find other markets. Its fire-resistant elastic is used in the manufacture of parts of fighter pilot suits for the U.S. Army, and the company is developing a line of anti-microbial products for both military and medical uses.
“Our customers still have faith in us, and there are so few companies left that have the know-how and capability to make some of these products,” Mr. Klein said.
The terms of U.S. Bankruptcy Court Judge William C. Hillman’s decision allowed NuTex’s customers to pre-pay orders, allowing NuTex to stay open through November, provided that it continues to pay Citizens Bank and agreed-upon monthly payment and keeps its cash flow above $218,000 per month.
Contact Aaron Nicodemus at email@example.com