North Carolina
Industrial Commission

MEMORANDUM

TO:         All Interested Parties

FROM:   Chairman Buck Lattimore

DATE:    August 1, 2003

RE:         Pillowtex, Inc.

            On Wednesday, Kannapolis-based Pillowtex, Inc. filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Delaware, listing $548 million in assets and $476 million in debts.

Pillowtex was self-insured for purposes of workers’ compensation insurance claims prior to December 19, 1997. After that date, Pillowtex, Inc. was insured. For claims occurring during the period of insurance, claimants should not experience any disruption in processing or payment of claims. For claims occurring during the period of self-insurance our current understanding is that Pillowtex has filed a Motion with the Bankruptcy Court seeking permission to continue to process and pay certain workers’ compensation claims. The Bankruptcy Court has not, as of this writing, issued an order.

            The Industrial Commission is in the process of determining the number of claims affected and determine a proper course of action for processing claims in the immediate future. It is anticipated that these determinations will be made in approximately three weeks. 

If any claimant does not receive benefits to which they are lawfully entitled or should benefits awarded be suspended or terminated for unexplained reasons, please notify the Industrial Commission. Questions or concerns regarding Pillowtex claims should be directed to: Stephen T. Gheen, Chief Deputy Commissioner, 919-807-2540 or gheen@ind.commerce.state.nc.us. Due to the volume of inquiries, email communication is requested if possible, though not required.

            The Industrial Commission website (www.comp.state.nc.us) will be updated as needed with additional information.