Even before its bankruptcy filing in 2005, Foamex International Inc., the largest manufacturer of foam for the automotive industry and consumer products, had a tumultuous history. For more than a decade, its founder had dominated the company, building it through a series of acquisitions aimed at consolidating the foam industry. This acquisition binge resulted in substantial leverage and a great deal of financial uncertainty. Now Foamex's current chairman and CEO, Ray Mabus, the former governor of Mississippi and U.S. ambassador to Saudi Arabia, is attempting to save the company's future. In this case, students learn about fundamental changes that can restore value to a struggling company while protecting the claims of creditors.
Case ID: 080313