<p>A bankruptcy judge in Georgia has approved Dan River Inc.'s reorganization plan, setting the stage for the company's emergence from Chapter 11 bankruptcy protection next month in the battered U.S. textile industry.</p><p>"During the bankruptcy proceedings, we have restructured the company both organizationally and financially to meet the challenges of today's global textile competition," said Joseph L. Lanier Jr., chief executive of the Danville, Va., company. "We have been confronted with many difficult and painful decisions during this time. These have been made on what outcome would best position Dan River to succeed in the future."</p><p>The reorganized company will be much leaner, having closed facilities and eliminated hundreds of jobs in Virginia, North Carolina, Georgia and Tennessee. But it will face an industry increasingly battered by low-cost foreign competition.</p><p>Already, the U.S. textile and apparel industry has lost more than 350,000 jobs since January 2001. Now, it faces a flood of imports from China due to the expiration of international quotas on Jan. 1.</p><p>The National Council of Textile Organizations says China is exporting pants, shirts, underwear and other apparel at 76 percent below U.S. producer prices. It claims the Chinese government has helped its textile industry through currency manipulation and billions of dollars in direct subsidies.</p><p>"When you're telling a company like (Dan River) that they have to fight with their hands tied behind their back and with both legs tied, it's tough to do," said Lloyd Wood, spokesman for the American Manufacturing Trade Action Coalition in Washington.</p><p>In court filings, executives said they hope to grow the company's core offerings, which include bedding and apparel fabrics, and speed up production.</p><p>Despite the competition overseas, executives believe there is still a demand for domestic apparel textiles. And by shortening production and delivery times, Dan River says it can respond faster to changing fashion trends and to its customers' schedules.</p><p>Dan River also touted some of the things it does well, such as pioneering its "Bed-in-a-Bag" package that includes comforters, sheets and pillowcases. The company expressed pride in its work developing new fabric styles and designs, including developing finishes that resist stains, fight germs and control odor.</p><p>But Wood said the company faces tougher challenges. Domestic textile manufacturers that focus on home fashions products like bedding _ as Dan River does _ have increasingly been forced to serve the small "replenishment" market, supplying big retailers that temporarily run out of products.</p><p>Domestic companies also have difficulty funding research and development when they are losing big sales to overseas companies, Wood said.</p><p>With Tuesday's approval from the U.S. Bankruptcy Court for the Northern District of Georgia, where Dan River is incorporated, the company expects to emerge from bankruptcy protection about Feb. 10.</p><p>The company has reached an agreement with Ableco Finance LLC of New York with a credit facility up to $120 million. And Chief Financial Officer Barry F. Shea will soon replace Lanier as chief executive. Lanier will remain chairman of the board of directors.</p><p>Executives did not respond to a telephone message Thursday morning.</p><p>Dan River has said it will issue new shares of common stock that could trade on the Nasdaq Stock Market or the Nasdaq Small Cap Market.</p><p>The company estimates it had $436.6 million in sales in fiscal 2004, down from $477.5 million a year earlier. Following another large loss last year, the company anticipates profits in the next three fiscal years.</p>
