Malden Mills and its creditors are optimistic that a plan filed on Friday in the US Bankruptcy Court will see the textile maker emerge from Chapter 11 protection by the end of July.

The plan, which has to be approved by a judge and then voted on by the parties, gives company president Aaron Feuerstein a three-year exclusive option to buy back a controlling share of the 1,400-employee company.

The company is thought to be keen to execute the option by 31 July, the deadline it has to reclaim a controlling interest for $92 million. After 31 July the cost increases.

''Today's filing is a significant milestone in our history,'' Feuerstein said in a statement. ''I am very proud of all of our employees, who have dedicated themselves toward pulling the company through this challenging time.''