His initial efforts to raise money went badly, according to Andrew Bene, head of real-estate finance for New York's Marshall & Stevens Inc., whom Mr. Feuerstein brought in to help. "He'd been all over the place trying to do it on his own," said Mr. Bene. Now, a photo of Mr. Feuerstein is taped to the wall next to Mr. Bene's desk, along with Mr. Feuerstein's frequent exhortation to his banker: "Ahhh! Where's my money?" A slew of Wall Street investment firms, commercial banks and insurance companies have passed on the deal. " `It's a dead market. He's an old guy,' " Mr. Bene recalls being told. And textile plants in the Northeast are not exactly in great demand. "You're not going to convert it into condominiums for yuppies coming up from Harvard," Mr. Bene concedes. So Messrs. Feuerstein and Bene have cobbled together a plan they hope will gain the textile veteran enough money -- just barely -- to exercise his option. Creditors have authorized Mr. Feuerstein to use $19 million of company cash that's separate from the assets available to the creditors. The towns of Lawrence and Metheun, which his plant straddles, together with the state of Massachusetts, have tentatively agreed to lend another $10 million in federal economic- development money. That leaves $63 million to be raised. Mr. Bene says he hopes to borrow another $10 million using the company's machinery as collateral. And he's considering an offer from Kennedy Funding of Hackensack -- the company that put together the Guccione townhouse deal -- to lend as much at $40 million against Malden Mills' real estate. The rate: 12% a year, plus another 4% when the loan is paid back. "They're not cheap," Mr. Bene says. Making up the last $10 million, says Mr. Bene, could force Mr. Feuerstein to give up as much as 25% to 50% of Malden Mills' ownership. In recent weeks, Mr. Feuerstein has been entertaining a stream of potential equity investors. Earlier this week, he asked creditors to extend the deadline until Aug. 21. "It's a very tough deal to do, but it's possible," says David Orlofsky, the Kroll Zolfo Cooper executive now serving as chief financial officer. "He needs to have the stars aligned." "I can't imagine that I can't succeed with this last $10 million," Mr. Feuerstein says. "I've almost got it all. I'm a little shy. Every day I think tomorrow will be the day I get it done." Word count: 2121 Copyright Dow Jones & Company Inc May 9, 2003
You've reached the end of your free preview.
Want to read all 5 pages?
- Fall '08
- Aaron Feuerstein, Malden Mills