Interco Files for Chapter 11, Eyes Reorganization

Interco Inc., the footwear and furniture maker struggling with a heavy load of junk bond debt, filed for Chapter 11 protection from its creditors today, seeking a stable environment in which to reorganize itself.

“The Chapter 11 filing will give the company the opportunity to complete negotiations on a restructuring plan while protecting the interests of the companies,” said Richard Loynd, Interco’s chairman and chief executive officer.

Interco has been struggling to pay off its large junk bond debt since it borrowed $1.65 billion in 1988 to fend off a hostile takeover attempt by corporate raiders Steven and Michael Rales.

At the time, the company made men’s and women’s apparel including London Fog rainwear, operated 201 retail stores such as do-it-yourself hardware stores and discount clothing stores, and owned footwear and furniture manufacturers and stores.

To pay off its debt, the company announced plans to sell off all of its companies except the four it currently operates: Converse and Florsheim footwear manufacturers and furniture makers Lane Co. and Broyhill Industries.