Polartec maker Malden Mills Industries Inc on Tuesday agreed a deal with creditors and banks that will allow it to emerge from Chapter 11 more than a year after filing for bankruptcy protection.

Lawyers representing the Massachusetts-based company told a judge a group of unsecured creditors and lenders that includes GE Capital Corp had agreed to a preliminary reorganisation plan.

However, CEO and president Aaron Feuerstein will have to raise money to purchase the interest of senior lenders and unsecured creditors to keep ownership of a firm that has been in his family for nearly a century.

Mr Feuerstein commented: "I am thankful to our lenders, in particular GE Capital, as well as our unsecured creditors, for working with us towards a plan of reorganisation designed to insure Malden Mills' future success.

"This past year has been one of the most challenging in our company's history. I have often said that our employees are Malden Mills' greatest asset and the way that we have overcome adversity to continue to innovate and manufacture high quality Polartec products has again proven our people to be world class.

"I am looking forward to successfully emerging from Chapter 11 and expect our best days to lie ahead."

The company now has until February 18 to formally file the reorganisation before a bankruptcy court judge.

At least three previous reorganisation plans for the textile maker, which employs around 1,200 workers, have been rejected in the past few months.