Correction: Foamex obtains court approval for sale to MatlinPatterson/ Black Diamond Group - Update

(Correction: Corrects the company description for Black Diamond Capital Management.)

Foamex International Inc. (FMXLQ.PK, FXMI.PK), the bankrupt producer of polyurethane foam-based solutions, said Wednesday that the U.S. bankruptcy court for the District of Delaware approved the sale of substantially all of the company's assets as a going concern to a group comprised of debt investment firm MatlinPatterson Global Opportunities Partners III L.P. and Black Diamond Capital Management, LLC.

Under the terms of the proposed sale, the group led by MatlinPatterson will purchase Foamex's assets as a going concern, assuming the ongoing obligations to the company's customers and vendors and the continued employment of its employees. Foamex expects the closing of the transaction as well as its own emergence from bankruptcy to occur in June 2009.

MatlinPatterson and its group reportedly won the bid for Foamex with a $155 million credit deal. U.S. Bankruptcy Judge Kevin Carey on Wednesday approved the group's stalking horse bidder's offer over the objections of Wayzata Capital Investment Partners LLC, whose bid had been deemed by Foamex to be the best offer.

Jack Johnson, President and Chief Executive Officer of Foamex said, "We are delighted with the outcome of this process. As we had hoped for at the outset of the filing, Foamex has emerged from the process expeditiously and with a stronger balance sheet. I would like to thank MatlinPatterson for their help in getting us to this point by supporting the company with the Stalking Horse Bid and providing DIP financing."

Foamex, which filed for bankruptcy protection in February 2009, said it will provide additional details of its emergence from bankruptcy and the next phase for the company in the next few weeks.

In mid-March, the bankruptcy court had granted final approval for Foamex and its affiliates to borrow up to $95 million under their debtor-in-possession, or DIP financing provided by MatlinPatterson and Bank of America Corp. (BAC).

MatlinPatterson Global Advisers LLC, a private equity firm focused on distressed control investments, was founded in 2000 and is based in New York City with additional offices in London, United Kingdom, Brazil, and Hong Kong.

Black Diamond Capital Management LLC is an alternative asset management firm based in Greenwich, CT and Lake Forest, IL.

FXMLQ.PK last closed trading at $0.016 on Wednesday, down $0.002 or 11.11% on a volume of 72,000 shares.

For comments and feedback contact: editorial@rttnews.com

Follow RTT