Bankruptcy court approves Foss asset sale

A federal bankruptcy court judge Monday approved the sale of virtually all of Foss Manufacturing’s assets to private investors on Monday, clearing the way for the Hampton plant to remain open and the workers to keep their jobs.

Alinian Capital Group LLC, a Florida-based investment firm, will buy the industrial fabric maker’s plant for $39 million in a deal that is expected to be completed May 15. No other firm placed a competing bid at the April 25 bankruptcy auction.

Alinian agreed to retain at least 90 percent of the workforce for a least a year. No layoffs are planned.

“Hopefully these guys can make it work,” said Jack Donovan, executive director of the New Hampshire Business Finance Authority, which agreed to hold off collecting on a $2.7 million loan as long as the plant continued as a going concern. “They’ve been able to break even and even do a little better during bankruptcy, and with that bankruptcy cloud gone, we hope that they will be able to prosper.”

The purchase would pay off nearly all of the secured lenders, and the federally backed U.S. Pension Benefit Guaranty Corp. would cover any pension shortfall.

But there will be virtually no money to cover $15 million in unsecured debt, including some of legal fees. The official creditors committee indicated that it planned to file a lawsuit against former CEO Stephen Foss and other former executives and third parties, seeking to return money to the company.

Foss resigned from the top post at the firm after the company filed for Chapter 11 bankruptcy protection last September amid charges that he looted the company. Foss had said that such allegations were not true.

Joe Foster, the Nashua attorney representing the official creditors, wouldn’t comment on any pending suit.

“At this point, we are all pleased that there is a successful sale that will keep the jobs in New Hampshire,” said Foster. – BOB SANDERS