Blue Torch Agrees to Buy Bankrupt Pillow Maker From H.I.G.

Under the deal, which must be approved by the judge overseeing Pegasus’ bankruptcy, affiliates of Blue Torch have agreed to be the stalking horse, or lead bidder, at an auction for the company, according to court filings. The value of the deal is likely to be made public once court papers with more details are filed in the Chapter 11 case.

“After he abruptly resigned from the company earlier this year, the debtors were left with a leadership void at a critical juncture, creating uncertainty and instability within the organization,” said Timothy Boates, a restructuring adviser said in an affidavit. Carmine and Gail Spinella founded Pegasus in 1990, building it into a maker of polyester-fiber-filled pillows and other bedding sold through major retailers including Walmart Inc. and Costco Wholesale Corp., according to court papers. H.I.G.’s affiliates began owning 85% of the company in 2021, with Carmine Spinella owning the rest.

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