TOLEDO, OHIO (Jan. 31, 1 p.m. ET) — Canadian foamer Domfoam International Inc. has filed for bankruptcy protection in the US after flagging sales and a million-dollar fine over price-fixing led the company into insolvency.
Domfoam filed for Chapter 15 protection in the U.S. Bankruptcy Court in Toledo, where it faced more than a dozen lawsuits over the inflated prices it charged for its foam that goes into carpet underlay, furniture and bedding, according to a report from Dow Jones.
Judge Mary Ann Whipple granted the company's request to put lawsuits against the company and its affiliates – Valle Foam and A-Z Sponge Foam Products – on hold while she decides if Domfoam is entitled to full protection in US court system, Dow Jones reported.
The protection is aimed at providing stability to allow the company to sell off its businesses and pay its debts.
Earlier in January, Domfoam pled guilty to fixing foam prices with a group of other manufacturers. The conspiracy is said to have started in January 1999 and ran for over a decade.