Fabric maker Galey & Lord is to be bought out of bankruptcy by Patriarch Partners LLC after the US Bankruptcy Court for the Northern District of Georgia approved the sale for $40 million in cash.

Patriarch Partners, one of the company's largest shareholders, will also assume an undisclosed amount of liabilities in the deal which is expected to close by 8 November.

"This transaction is in the best interests of our customers, employees, suppliers and stakeholders," said John J Heldrich Jr, president and CEO of Galey & Lord.

Galey & Lord, which supplies denim, khaki and corduroy fabrics for the fashion apparel and uniform markets, also said it was reorganising its business into four units - sportswear, jeans, specialty markets and uniforms - each headed by its own managing director.

The managing directors and their respective divisions include: Bob McCormack (sportswear); Jake Fraser (jeans); Rick Waide (specialty markets); and Paul Tantillo (uniforms).

In addition, Al Blalock has been named senior vice president of operations and Tim Driver senior vice president of international business relations.

Mr Blalock is responsible for all aspects of the company's domestic manufacturing operations. Mr Driver is responsible for optimising international operations including the Swift Denim Hidalgo facility in Mexico, and will work to finalisze and implement ventures in other parts of the world.

The senior management team will be based in Atlanta.

Atlanta-based Galey & Lord emerged from bankruptcy in March and entered voluntary bankruptcy protection again in August 2004 to assist the bankruptcy sale process.

It operates domestically and internationally through joint ventures in Europe, North Africa, Asia and Mexico, with customers including VF, Gap, Old Navy, Banana Republic, Polo Ralph Lauren, Abercrombie & Fitch, Levi's, Tommy Hilfiger, LL Bean, Nautica, Eddie Bauer and Liz Claiborne.