H.I.G.-Backed Pillow Maker Goes Bust Two Years After Takeover

Pillow maker Pegasus Home Fashions Inc. filed for bankruptcy with plans to sell itself about two years after H.I.G. Capital took over the business.

(Bloomberg) — Pillow maker Pegasus Home Fashions Inc. filed for bankruptcy with plans to sell itself about two years after H.I.G. Capital took over the business.

Pegasus listed assets and liabilities of as much as $500 million each in a Chapter 11 bankruptcy petition filed in Delaware on Tuesday. The filing gives the company protection from creditors while it works on repaying them.

Carmine and Gail Spinella founded Elizabeth, New Jersey-based Pegasus in 1990, according to court papers. It quickly became one of the biggest manufacturers of pillows filled with polyester fiber.

H.I.G. announced it had completed the purchase of Pegasus in August of 2021. Lenders took on most of the equity in Pegasus earlier this year after the company ran low on cash, court papers show.

Pegasus has lined up a buyer for the business, which will set a floor for further offers during bankruptcy.

Representatives for H.I.G. and Pegasus didn’t immediately respond to requests for comment.

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