Textile products manufacturer CMI Industries Inc has filed a motion in the United States Bankruptcy Court for the District of Delaware requesting dismissal of the involuntary petition filed against the company under the Bankruptcy Code by certain holders of the company's 9 1/2% Senior Subordinated Notes.

The motion states that the involuntary petition should be dismissed because the Indenture which sets forth the rights between the parties prohibits the petitioning creditors from filing an involuntary petition against the company.

Other reasons for dismissal of the involuntary petition are because the petitioning creditors have filed the involuntary petition in bad faith, their claims are subject to a bona fide dispute making the claims ineligible for an involuntary petition filing, the company is generally paying it debts as they come due, and dismissal is in the best interest of both the creditors and the company.

According to the motion, on the date of the the involuntary petition was filed, the company was current with its unsecured creditors, owed nothing on its bank line of credit, had $12,000,000 in borrowing capacity under that line of credit, and had significant unencumbered assets and $500,000 in readily available cash investments.

Said Joseph L. Gorga, president of CMI Industries Inc: "We have the resources to and will continue to service our customers and to deal with our business partners in the ordinary course as we have in the past while we work to resolve this matter. While we anticipate that the bankruptcy court will find in our favour and dismiss the involuntary petition, in the event an order for relief under the bankruptcy code is issued, our business partners and vendors should be aware that any credit extended to the company during this gap period will be considered a priority claim."

Under the bankruptcy laws, CMI has full authority to continue to operate its business and to carry out its other business plans without court supervision unless and until a court hearing is resolved adverse to the company.