Malden Mills

About Malden Mills

Malden Mills, manufacturer of Polartec fleece, filed for Chapter 11 bankruptcy in November 2001. CEO Aaron Feuerstein had famously continued paying employees after a 1995 fire destroyed the factory. Feuerstein rebuilt the factory in Lawrence, Massachusetts, at a cost of 400 million. GE Capital provided financing. When debt became unsustainable, GE Capital pushed Malden Mills into bankruptcy. Feuerstein lost control of the company. The case was poignant because Feuerstein had been praised as a hero for keeping workers employed after the fire. However, the decision to rebuild with debt proved financially fatal. Malden Mills emerged from bankruptcy as Polartec LLC. Feuerstein died in 2021. The case illustrates how ethical business decisions can conflict with financial sustainability.