Suitmaker Hartmarx files to reorganize

Hartmarx Corp., a Chicago-based maker of men's suits, sports coats and other apparel, filed a Chapter 11 petition on Jan. 23 in its hometown along with 50 affiliates, listing assets of $483 million and debt totaling $261 million as of Oct. 9.

The reorganization will be financed with a secured loan of as much as $160 million provided by the existing secured lenders owed $114 million on a revolving credit. The new loan subsumes the pre-bankruptcy revolver debt.

Annual revenue of $500 million decreased since 2006 as a result of lower demand, the Chief Financial Officer Glenn R. Morgan said in a court filing. Chapter 11 became necessary when the lenders on Jan. 13 notified the company it was $7 million out of formula and not eligible for more borrowing.

In addition to the revolving credit, Morgan said debt includes $15.5 million in industrial-revenue bonds, $12 million in mortgages, and $70 million owing to trade suppliers.

Manufacturing is performed in the company's own facilities and by contractors. The brand names include Hart Schaffner Marx and Hickey Freeman.

During the past two years, the closing high for Hartmarx was $8.55 on July 31, 2007. The shares closed Jan. 23 at 15 cents in over-the-counter trading.

The case is In re Hartmarx Corp., 09-02046, U.S. Bankruptcy Court, Northern District of Illinois (Chicago).