Fire-torn Malden Mills reaches agreement with insurer on payment
Jun. 04, 1997
LAWRENCE, Mass. (AP) _ An insurer for Malden Mills Industries Inc. has agreed to pay the company ``substantially all'' of the losses suffered in a fire that devastated the manufacturer 18 months ago.
Malden Mills officials wouldn't comment on the exact amount of the settlement, but owner Aaron Feuerstein has said the company spent more than $300 million to rebuild after the Dec. 11, 1995, fire.
``Under the agreement, Malden Mills expects to recover substantially all of its loss,'' the company said in a statement Wednesday.
After losing three buildings in the fire, the 71-year-old Feuerstein attraction national attention for his quick decision to rebuild. All but 150 of the company's 3,100 employees are now back on the job.
The company has boosted production of its signature fabrics, Polartec and Polarfleece, by 40 percent since the fire, which destroyed three buildings and knocked out much of production. The fabrics are used as lightweight ``fleece'' insulation in many brand-name clothes. Fiscal 1997 sales for the company are expected to approach $400 million.
``We're pleased with the settlement,'' said Ernst Weglein, general counsel for Malden Mills. ``The major significance is that we can put this aside and we can concentrate on our business, which is making and selling fabric.''
The company borrowed more than $150 million to cover losses and build a state-of-the-art dyeing and finishing facility now operating.
The American International Group Inc., one of the largest industrial insurers in the world, was the main Malden Mills insurer through its Commerce and Industry Insurance unit.
The cause of the fire has not officially been determined, although the state fire marshal has said there is no evidence pointing to arson.