As filed with the Securities and Exchange Commission on July 9, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
TEXFI INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 56-0795032
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
5400 GLENWOOD AVENUE
SUITE 215
RALEIGH, NORTH CAROLINA 27612
(919) 783-4736
(Address, including zip code, and telephone number
including area code, of Registrant's principal executive offices)
DANE L. VINCENT
5400 GLENWOOD AVENUE
SUITE 215
RALEIGH, NORTH CAROLINA 27612
(919) 783-4736
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------
Copies to:
Jonathan Goldstein, Esq. Richard C. Hoffman, Esq.
Winston & Strawn Richard C. Hoffman, P.C.
200 Park Avenue 16 Cove Road
New York, New York 10166 Old Greenwich, CT 06870
(212) 294-6700 (203) 698-1665
-------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of each class of Number of Proposed maximum Proposed maximum
securities to be shares to be offering price per aggregate offering Amount of
registered registered share (1) price (1) registration fee
<S> <C> <C> <C> <C>
Common Stock, $1.00 par value......... 924,000 $4.47 $4,130,280 $1,252
======================================== ================ ====================== ====================== ====================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) on the basis of the average of the high and low prices
reported on the New York Stock Exchange Composite Tape on July 7, 1997.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
<PAGE>
Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the Registration Statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED JULY 9, 1997
PROSPECTUS
924,000 SHARES
TEXFI INDUSTRIES, INC.
COMMON STOCK, $1.00 PAR VALUE
--------------
This Prospectus relates to 924,000 shares (the "Shares") of Common
Stock, par value $1.00 per share ("Common Stock"), of Texfi Industries, Inc.
(the "Company"), which have been issued pursuant to a Stock and Option Purchase
Agreement, dated as of May 24, 1994 (the "Stock and Option Purchase Agreement"),
by and between the Company and Chadbourne Corporation (the "Selling
Stockholder") to, and which may be offered for resale from time to time by, the
Selling Stockholder.
The Company's Common Stock is listed on the New York Stock Exchange
under the symbol "TXF". On July 7, 1997, the reported last sale price of the
Common Stock on the New York Stock Exchange Composite Tape was $4.44 per share.
SEE "RISK FACTORS" COMMENCING ON PAGE 3 FOR CERTAIN FACTORS THAT SHOULD
BE CONSIDERED BY PROSPECTIVE INVESTORS.
--------------
<TABLE>
<CAPTION>
Price to Underwriting Discounts Proceeds to Proceeds to the
Public and Commissions the Company Selling Stockholder
<S> <C> <C> <C> <C> <C> <C>
Per Share......... $(1)(2) $(1)(2) $0(3) $(1)(4)
Total............... $(1)(2) $(1)(2) $0(3) $(1)(4)
</TABLE>
(1) The Selling Stockholder may from time to time offer and sell the Shares
held by it directly or through agents or broker-dealers on terms,
including the price per share, to be determined at the time of sale.
(2) To the extent required, the names of any agent or broker-dealer and
applicable commissions or discounts and any other required information
with respect to any particular offer will be set forth in an
accompanying Prospectus Supplement. The Selling Stockholder reserves the
sole right to accept or reject, in whole or in part, any proposed
purchase of the Shares to be made directly or through agents.
(3) The Company will not receive any of the proceeds from the sale of the
Shares offered hereby.
(4) The aggregate proceeds to the Selling Stockholder from the sale of the
Shares offered hereby will be the purchase price thereof, less the
aggregate brokerage commissions, agent's discount or underwriter's
discount, if any, and the expenses of registration and distribution
(which will be borne by the Selling Stockholder).
No person has been authorized by the Company to give any information or
to make any representations, other than as contained in this Prospectus, and, if
given or made, such information or representations must not be relied upon.
Neither delivery of this Prospectus nor any sale made hereunder shall,
under any circumstances, create any implication that there has been no change in
the affairs of the Company since the date hereof.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is July ____, 1997.
1
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the offices of
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as the following regional offices of the
Commission: Seven World Trade Center, Suite 1300, New York, New York 10048; and
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition,
the Commission maintains a Web site that contains such materials at
http://www.sec.gov. The Company's Common Stock is listed on the New York Stock
Exchange, 20 Broad Street, New York, New York 10005, and such reports, proxy
statements and other information concerning the Company can be inspected at such
Exchange.
The Company has filed with the Commission a Registration Statement
(which term shall include all amendments, exhibits and schedules thereto) on
Form S-3 under the Securities Act of 1933, as amended (the "Securities Act")
with respect to the Shares offered hereby. This Prospectus does not contain all
the information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission, and
to which reference is hereby made. Statements made in this Prospectus as to the
contents of any document referred to are not necessarily complete. With respect
to each such document filed as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the matter
involved, and each such statement shall be deemed qualified in its entirety by
such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in this Prospectus by reference and made a part hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended November 1, 1996;
(b) The Company's Quarterly Report on Form 10-Q for the period
ended January 31, 1997;
(c) The Company's Quarterly Report on Form 10-Q for the period
ended May 2, 1997; and
(d) The description of the class of securities being offered which
is contained in the Company's Form 8-A/A dated July 9, 1997.
All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the filing of a post-effective amendment which indicates
that all the Shares offered hereby are sold or which deregisters all the Shares
then remaining unsold shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing such documents. Any
statement contained herein or in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained in any
subsequently filed document which is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide, without charge, to each person including any
beneficial owner, to whom a copy of this Prospectus is delivered, on the written
or oral request of such person, a copy of any or all of the documents
incorporated herein by reference (other than exhibits thereto, unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates). Written or telephone requests for such copies
should be directed to the Company's principal office: Texfi Industries, Inc.,
5400 Glenwood Avenue, Suite 215, Raleigh, North Carolina 27612, Attention: Dane
L. Vincent, Vice President, Chief Financial Officer and Treasurer, telephone
number (919) 783-4736.
2
<PAGE>
THE COMPANY
The Company was incorporated in Delaware in 1963. The Company
manufactures and markets a diverse line of textile products from a variety of
raw materials, including natural and synthetic materials. The Company's
principal executive offices are located at 5400 Glenwood Avenue, Suite 215,
Raleigh, North Carolina 27612, telephone (919) 783-4736.
The Company's operations include two divisions: Texfi Blends and Texfi
Narrow Fabrics. The Texfi Blends division is the Company's largest division,
operating three manufacturing facilities located in Rocky Mount and
Fayetteville, North Carolina and Jefferson, Georgia. The division's sales and
marketing headquarters are in New York City, with branch offices or agents in
other major cities throughout the United States and Europe. The Texfi Blends
division manufactures products made from textured polyester, flame-retardant
polyester, and blends of polyester, rayon, and wool. These products are sold
worldwide to the mens' wear, womens' wear and childrens' wear apparel, uniform,
home furnishings, and export markets.
The Texfi Narrow Fabrics division operates manufacturing facilities in
Asheboro, North Carolina. It maintains a sales office in Asheboro, North
Carolina and agents in several United States cities. Texfi Narrow Fabrics
manufactures products from polyester, nylon and rubber which are sold
domestically to the intimate apparel, insert apparel, medical and automotive
markets.
"SAFE HARBOR" STATEMENT UNDER SECTION 27A OF THE SECURITIES ACT OF 1933, AS
AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
Except for the historical information presented, the matters disclosed
in this Prospectus and the documents incorporated or deemed to be incorporated
herein by reference herein include forward-looking statements. These statements
represent the Company's judgment on the future and are subject to risks and
uncertainties that could cause actual results to differ materially. Such factors
include, without limitation, the factors discussed under the heading "Risk
Factors" below and factors that are addressed from time to time in the documents
incorporated or deemed to be incorporated herein by reference herein.
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS,
TOGETHER WITH ALL OF THE OTHER INFORMATION APPEARING IN THIS PROSPECTUS.
INDUSTRY CONDITIONS. The textile and apparel industry is highly
competitive with a large number of domestic and foreign manufacturers, none of
which dominates the market for any of the Company's product lines. The Company
competes on the basis of styling, price, product performance and customer
service. The failure of the Company to compete effectively in this environment
could have a material adverse effect on its results of operations and financial
condition.
The Company and the U.S. textile industry are sensitive to the business
cycle of the national economy. This has contributed historically to fluctuations
in the Company's results of operations and such fluctuations can be expected to
occur in the future.
The North American Free Trade Agreement ("NAFTA"), which became
effective on January 1, 1994, has created a free-trade zone among Canada, Mexico
and the U.S. NAFTA contains safeguards which were sought by the U.S. textile
industry, including a rule of origin requirement that products be processed in
one of the three countries in order to benefit from the agreement. NAFTA will
phase out all trade restrictions and tariffs on textiles and apparel among the
three countries. In addition, legislation has been proposed that would grant
benefits to other countries in the Caribbean and Central and South America that
are roughly equivalent to those applicable to Mexico under NAFTA. There can be
no assurance that NAFTA, or the possible adoption of proposed legislation, will
not adversely affect the Registrant.
3
<PAGE>
The World Trade Organization was formed in January 1995 and is the
successor to the General Agreement on Tariffs and Trade. This new multilateral
trade organization has set forth mechanisms by which world trade in textiles and
clothing is being progressively liberalized by phasing-out quotas and reducing
duties over a ten-year period which began in January of 1995. There can be no
assurance that this reduction in import protection for domestic textile
manufacturers will not adversely affect the Registrant.
LOSSES FROM OPERATIONS; POSSIBILITY OF FUTURE LOSSES. The Company had
losses from continuing operations of $1,424,000, $734,000 and $2,584,000 for the
fiscal years ended November 1, 1996, November 3, 1995 and October 28, 1994,
respectively. At November 1, 1996, the Company had an accumulated stockholders'
deficit of $47,062,000. There can be no assurance that the Company will operate
profitably in the future.
ABSENCE OF DIVIDENDS. The Company has not, in recent years, paid any
cash or other dividends on its Common Stock, and there can be no assurance that
the Company will pay cash dividends in the foreseeable future. Certain
agreements to which the Company is a party contain certain limitations on the
Company's ability to pay dividends.
RAW MATERIALS. The Company purchases from outside suppliers natural and
synthetic fibers, rubber, dyes and chemicals for use in its fabric manufacturing
operations. Although the Company has been able to acquire sufficient quantities
of raw materials for its operations in the past, any shortage of supply or
significant price increases could adversely affect its results of operations.
GOVERNMENTAL REGULATIONS AND ENVIRONMENTAL CONSIDERATIONS. The
Company's operations must meet extensive federal, state and local regulatory
standards in the areas of safety, health and environmental pollution controls.
The existence of groundwater contaminants primarily of a type often found in
commonly used industrial solvents was discovered at one of the Company's
facilities. This facility has not been operated by the Company since 1980 and
has been sold to another party. The State of North Carolina has issued a permit
to discharge treated groundwater, and treatment systems have been installed to
complete groundwater remediation. The Company's cost to monitor and maintain the
treatment system will be approximately $54,000 annually until the site is
remediated. In addition, there may be other potential environmental conditions
at the site to be addressed, and the remedial plan does not cover these
conditions; however, management does not believe that the cost of taking
corrective action will have a material adverse effect on the Company's financial
condition.
4
<PAGE>
SELLING STOCKHOLDER
The Selling Stockholder is Chadbourne Corporation. Two of the
executive officers and directors of Chadbourne Corporation, Richard L. Kramer
and William L. Remley, are also directors and executive officers of the Company.
The Shares offered hereby are being registered pursuant to the demand of the
Selling Stockholder pursuant to the Stock and Option Purchase Agreement. Prior
to the offering, as of July 7, 1997, the Selling Stockholder beneficially owned
2,043,700 shares of Common Stock (including 600,000 shares of Common Stock
subject to an option (the "Option") exercisable on or prior to May 24, 1999
granted pursuant to the Stock and Option Purchase Agreement), representing
approximately 23.4% of the outstanding Common Stock. If all of the Shares are
sold, after the offering the amount and the percentage of the Company's Common
Stock (assuming the Selling Stockholder has exercised the Option) that would be
owned by the Selling Stockholder is 1,119,700 shares or 12.8% of the Company's
outstanding Common Stock.
USE OF PROCEEDS
The Shares are being offered hereby for the account of the Selling
Stockholder. Accordingly, the Company will not receive any of the proceeds from
the sale of the Shares offered hereby.
PLAN OF DISTRIBUTION
Although the Selling Stockholder has advised the Company that it does
not currently have an intent to immediately sell the Shares, the Selling
Stockholder may choose to sell all or a portion of its Shares from time to time
in the manner described herein. Sales of the Shares offered hereby may be
effected from time to time by the Selling Stockholder, or pledgees, donees or
transferees of or other successors in interest to the Selling Stockholder, in
one or more transactions (which may involve block transactions) on the New York
Stock Exchange or such other exchange or market on which the Common Stock may
from time to time be traded, in negotiated transactions or in a combination of
any such transactions. Such transactions may be effected by the Selling
Stockholder at market prices prevailing at the time of sale, at prices related
to such prevailing market prices, at negotiated prices or at fixed prices. The
Selling Stockholder may effect such transactions by selling Shares to or through
broker-dealers, including purchases by a broker-dealer as principal and resale
by such broker-dealer for its account pursuant to this Prospectus. Such
broker-dealers will receive compensation in the form of discounts or commissions
from the Selling Stockholder and may receive commissions from the purchasers of
Shares for whom such broker-dealers may act as agents (which discounts or
commissions from the Selling Stockholder or such purchasers, if in excess of
those customary for the types of transactions involved, will be disclosed in a
supplemental prospectus).
The Selling Stockholder and any broker-dealer that participates with
the Selling Stockholder in the distribution of the Shares may be deemed to be
"underwriters" within the meaning of the Securities Act, and any commissions or
discounts received by them and any profit on the resale of the Shares purchased
by them may be deemed to be underwriting discounts or commissions under the
Securities Act. The Company has agreed to indemnify the Selling Stockholder and
its officers, directors, employees and agents and each person who controls the
Selling Stockholder (within the meaning of the Securities Act) against certain
liabilities, including liabilities under the Securities Act, and to make such
provisions as are reasonably requested by the indemnified party for contribution
in the event such indemnification is unavailable for any reason. The Stock and
Option Purchase Agreement provides that the Company will use its best efforts to
effect the registration and the sale of the Shares in accordance with the
intended method of disposition thereof, which includes, if requested, entering
into underwriting agreements in customary form. Such agreements may contain
provisions requiring the Company to indemnify persons deemed to be underwriters
and provisions for contribution in the event such indemnification is
unavailable.
The costs and expenses of the registration and distribution of the
Shares will be paid by the Selling Stockholder.
The Selling Stockholder has certain rights to request that the Company
register the Shares under the Securities Act (a "Demand Registration") pursuant
to provisions of the Stock and Option Purchase Agreement
5
<PAGE>
and the Registration Statement of which this Prospectus is a part has been filed
under these provisions. The Stock and Option Purchase Agreement provides that
the Company must use its best efforts to keep the Registration Statement, of
which this Prospectus is a part, continuously effective and usable for a period
of at least 270 days from the date on which the Commission declares the
Registration Statement effective or such shorter period which will terminate
when all the Shares covered by the Registration Statement have been sold
pursuant to the Registration Statement. The Selling Stockholder has the right to
one additional Demand Registration under the Stock and Option Purchase
Agreement.
LEGAL MATTERS
The legality of the issuance of the Shares offered hereby will be
passed upon for the Company by Schell Bray Aycock Abel & Livingston P.L.L.C.
EXPERTS
The consolidated financial statements of the Company appearing in the
Company's Annual Report (Form 10-K) for the year ended November 1, 1996, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
6
<PAGE>
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF
ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY
PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE HEREOF.
----------------------
TABLE OF CONTENTS
Page
Available Information...........................................2
Incorporation of Certain Documents by
Reference.....................................................2
The Company.....................................................3
"Safe Harbor" Statement under Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended...............................3
Risk Factors....................................................3
Selling Stockholder.............................................5
Use of Proceeds.................................................5
Plan of Distribution............................................5
Legal Matters...................................................6
Experts.........................................................6
__________________
PROSPECTUS
__________________
TEXFI INDUSTRIES, INC.
924,000 SHARES
COMMON STOCK
July ____, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all fees and expenses payable by the
Selling Stockholder in connection with the issuance and distribution of the
Shares being registered hereby (other than underwriting discounts and
commissions) (except that the Company will pay its internal expenses including,
without limitation, all salaries and expenses of its officers and employees
performing legal and accounting duties). All of such expenses, except the
Securities and Exchange Commission filing fee, are estimated.
SEC filing fee............................$1,252
Legal fees and expenses...................50,000
Accounting fees and expenses...............3,000
Miscellaneous................................500
Total...........................$54,752
ITEMS 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is a Delaware corporation. Reference is made to Section 145
of the Delaware General Corporation Law, as amended (the "GCL"), which provides
that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of such corporation), by reason of the fact that
such person is or was a director, officer, employee or agent of the corporation,
or is or was serving at its request in such capacity of another corporation or
business organization against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person acted
in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that such
person's conduct was unlawful. A Delaware corporation may indemnify officers and
directors in an action by or in the right of a corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him
against the expenses (including attorneys' fees) that such officer or director
actually and reasonably incurred.
Reference is also made to Section 102(b)(7) of the GCL, which permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the GCL or (iv) for any transaction from which the director
derived an improper personal benefit.
The certificate of incorporation of the Company provides for the
elimination of personal liability of a director for breach of fiduciary duty as
permitted by Section 102(b)(7) of the GCL. The by-laws of the Company provide
that the Company shall indemnify its directors and officers to the extent and
under the circumstances permitted by Section 145 of the GCL.
Article VI of the by-laws of the Company provides as follows:
"Section 1. The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a
II-1
<PAGE>
director or officer of the Corporation, or is or was serving at the request of
the Corporation, as a director or officer of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
Section 2. The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director or
officer of the Corporation, or is or was serving at the request of the
Corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Delaware Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Delaware Court of Chancery or
such other court shall deem proper.
Section 3. Any indemnification under Sections 1 and 2 (unless ordered
by a court) shall be made by the Corporation only as authorized in the specific
case upon a determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in Sections 1 and 2. Such determination
shall be made (a) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or proceeding,
or (b) if such a quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (c) by the stockholders.
Section 4. To the extent that a director, officer, employee or agent of
the Corporation has been successful on the merits or otherwise in defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
Section 5. Expenses incurred by a director or officer in defending a
civil or criminal action, suit or proceeding shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of the director or officer to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Corporation as authorized in this Article.
Section 6. In any case where the indemnification and advancement of
expenses of a director or officer is neither mandated nor prohibited by Sections
1, 2, 4 or 5 of this Article, or in the case of an employee or agent of the
Corporation who is not a director or officer of the Corporation, the Corporation
may by vote of the disinterested directors (as defined under Delaware law) or
the stockholders, indemnify or agree to indemnify such person to the extent
permitted by applicable law against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with any threatened, pending, or completed action, suit or
proceeding, whether civil or criminal, to which he is or was, or is threatened
to be made, a party by reason of the fact that he is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise.
II-2
<PAGE>
Section 7. Any indemnification and advancement of expenses mandated or
permitted to be made under this Article to a person who was a director, officer,
employee or agent shall, unless otherwise provided when authorized or ratified,
continue even though such person has ceased to be a director, officer, employee
or agent, if such indemnification is made on account of expenses, judgments,
fines, or amounts paid in settlement reasonably incurred by him by reason of his
former office or position; and any indemnification provided for hereunder shall
inure to the benefit of the heirs, executors and administrators of such person.
Notwithstanding any other provisions set forth in this Article, indemnification
shall be mandated or permitted hereunder only to the extent that such
indemnification shall not duplicate indemnity or reimbursement received by the
person to be indemnified otherwise than under this Article.
Section 8. The Corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent or another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article or otherwise.
Section 9. The provisions of this Article VI are separable, and if any
provision be held invalid, all other provisions shall remain fully in effect and
such invalid provision shall only be curtailed to the extent necessary to make
such provision enforceable, it being the intent of this Article VI that the
Corporation indemnify each of its directors, officers, employees and agents to
the maximum extent permitted by law.
Section 10. For purposes of this Article VI, references to "the
Corporation" include all constituent corporations absorbed in a consolidation or
merger as well as the resulting or surviving corporation so that any person who
is or was a director, officer, employee or agent of such a constituent
corporation or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise shall stand in the same position under
the provisions of this Article VI with respect to the resulting or surviving
corporation as he would if he had served the resulting or surviving corporation
in the same capacity."
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
A list of exhibits is set forth on the Index of Exhibits.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered thereby and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
The undersigned Registrant hereby further undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which,
individually or
II-3
<PAGE>
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in the
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement.
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The Company has directors and officers liability insurance that insures
the directors and officers of the Company against certain liabilities up to an
aggregate of $10,000,000.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the undersigned
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on July 8, 1997.
TEXFI INDUSTRIES, INC.
By: /s/ Richard L. Kramer
Name: Richard L. Kramer
Title: Chairman of the Board
Each person whose signature appears below hereby severally constitutes
and appoints William L. Remley and Richard C. Hoffman, and each of them singly,
his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, to sign for him and in his name, place and
stead in any and all capacities indicated below, the Registration Statement on
Form S-3 filed herewith, and any and all pre-effective and post-effective
amendments to said Registration Statement and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary fully to all intents and purposes as he might or could
do in person thereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their or his or her substitute, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
<S> <C> <C>
/s/ Richard L. Kramer Chairman of the Board July 8, 1997
- --------------------------------
Richard L. Kramer
/s/ William L. Remley Chief Executive Officer and Vice July 8, 1997
- ------------------------------- Chairman of the Board
William L. Remley
/s/ Andrew J. Parise, Jr. President, Chief Operating July 8, 1997
- -------------------------------- Officer and Director
Andrew J. Parise, Jr.
II-5
<PAGE>
NAME TITLE DATE
/s/ Richard C. Hoffman Secretary and Director July 8, 1997
- --------------------------------
Richard C. Hoffman
/s/ Joel J. Karp Director July 8, 1997
- -----------------------------------
Joel J. Karp
/s/ John D. Mazzuto Director July 8, 1997
- ---------------------------------
John D. Mazzuto
/s/ Dane L. Vincent Vice President, Chief Financial July 8, 1997
- ------------------------------- Officer and Treasurer
Dane L. Vincent
</TABLE>
II-6
<PAGE>
INDEX OF EXHIBITS
EXHIBIT NUMBER EXHIBIT
*4.1 Restated Certificate of Incorporation of
Registrant dated August 13, 1969, filed as Exhibit
(3)(a)(1) to Registrant's Form 10-K Annual Report
for the fiscal year ended October 31, 1980.
*4.2 Certificate of Amendment of Certificate of
Incorporation of Registrant dated March 16, 1972,
filed as Exhibit (3)(a)(2) to Registrant's Form
10-K Annual Report for the fiscal year ended
October 31, 1980.
*4.3 Certificate of Amendment of Certificate of
Incorporation of Registrant dated March 27, 1978,
filed as Exhibit (3)(a)(3) to Registrant's Form
10-K Annual Report for the fiscal year ended
October 31, 1980.
*4.4 Certificate of Amendment of Certificate of
Incorporation of Registrant dated March 19, 1978,
filed as Exhibit 4.4 to Registrant's Form S-8
Registration Statement (No. 33-14697).
*4.5 Certificate of Amendment of Certificate of
Incorporation of Registrant dated March 20, 1987,
filed as Exhibit 4.5 to Registrant's Form S-8
Registration Statement (No. 33-14697).
*4.6 Certificate of Amendment of Certificate of
Incorporation of Registrant dated September 28,
1987, filed as Exhibit 4(a)(6) to Registrant's
Form S-2 Registration Statement (No. 33-14697).
*4.7 Certificate of Designations of Registrant dated
November 20, 1987, filed as Exhibit 4(a)(7) to
Registrant's Form S-2 Registration Statement (No.
33-16794).
*4.8 Certificate of Designations of Registrant dated
March 8, 1988, filed as Exhibit 4(a)(8) to
Registrant's Form S-2 Registration Statement (No.
33-20131).
*4.9 Certificate of Designations of Registrant dated
August 4, 1988, filed as Exhibit 4(a)(9) to
Registrant's Form 10-Q Quarterly Report for the
fiscal quarter ended July 29, 1988.
*4.10 Bylaws of Registrant, filed as Exhibit 4.6 to
Registrant's Form S-8 Registration Statement (No.
33-14697).
*4.11 Amendment to Bylaws of Registrant, filed as
Exhibit 4(b)(2) to Registrant's Form S-2
Registration Statement (No. 33-16794).
*4.12 Amendment to Bylaws of Registrant adopted by
Registrant's Board of Directors on January 18,
1991, filed as Exhibit 3(b)(3) to Registrant's
Form 10-K Annual Report for the fiscal year ended
November 2, 1990.
*4.13 Amendment to Bylaws of Registrant adopted by
Registrant's Board of Directors on August 31,
1994, filed as Exhibit 4(b)(4) to Registrant's
Form 10-Q Quarterly Report for the fiscal quarter
ended July 29, 1994.
<PAGE>
EXHIBIT NUMBER
Exhibit
*4.14 Amendment to Bylaws of Registrant adopted by
Registrant's Board of Directors on September 7,
1994, filed as Exhibit 4(b)(5) to Registrant's
Form 10-Q Quarterly Report for the fiscal quarter
ended July 29, 1994.
*4.15 Indenture between Registrant and Rhode Island
Hospital Trust National Bank, Trustee, with a copy
of Subordinated Debentures due April 1, 1995,
Series A, Subordinated Debentures due April 1,
1995, Series B and Subordinated Extendible
Debentures due April 1, 2000, Series C attached,
filed as Exhibit 4(f) to Registrant's Form S-2
Registration Statement (No. 33-32485).
*4.16 First Supplemental Indenture between Registrant
and Rhode Island Hospital Trust National Bank,
Trustee, with a revised Subordinated Debenture due
April 1, 1995, Series B attached, filed as Exhibit
4 to Registrant's Form 8-K Current Form dated May
16, 1990.
*4.17 Indenture dated October 1, 1991 between Registrant
and First National Bank of Boston, Trustee, with
copy of 11-1/4% Convertible Senior Subordinated
Debenture due October 1, 1997, filed as Exhibit
4(a)(1) to Registrant's Form 10-K Annual Report
for the fiscal year ended November 1, 1991.
*4.18 Indenture dated September 8, 1993 between
Registrant and First Union National Bank of North
Carolina, Trustee, with copy of 8-3/4% Senior
Subordinated Debenture due August 1, 1999, filed
as Exhibit 4(c)(2) to Registrant's Form 10-Q
Quarterly Report for the fiscal quarter ended July
30, 1993.
*4.19 First Supplemental Indenture dated as of March 10,
1995 between Registrant and First Union National
Bank of North Carolina, as Trustee, filed as
Exhibit 4(a)(1) to Registrant's Form 8-K Current
Form as of March 15, 1996.
*4.20 Second Supplemental Indenture dated as of March
15, 1996 between Registrant and First Union
National Bank of North Carolina, as Trustee, filed
as Exhibit 4(a)(2) to Registrant's Form 8-K
Current Form as of March 15, 1996.
*4.21 Specimen Common Stock ($1 par value) certificates,
filed as Exhibit 4.01 to Amendment No. 2 to
Registrant's Form S-1 Registration Statement (No.
2-41653).
*4.22 Rights Agreement dated July 22, 1988 between
Registrant and First Union National Bank of North
Carolina, as Rights Agent, filed as Exhibit 1 to
Registrant's Form 8-K Current Form dated July 22,
1988.
*4.23 Form of Rights Certificate, filed as Exhibit B to
Exhibit 1 to Registrant's Form 8-K Current Form
dated July 22, 1988.
<PAGE>
EXHIBIT NUMBER Exhibit
*4.24 Amendment to Rights Agreement between Registrant
and First Union National Bank of North Carolina
dated October 31, 1988, filed as Exhibit 4(e)(3)
to Registrant's Form S-2 Registration Statement
(No. 33-32485).
*4.25 Second Amendment to Rights Agreement dated May 24,
1994 between Registrant and First Union National
Bank of North Carolina, as Rights Agent, filed as
Exhibit 4(e)(4) to Registrant's Form 10-Q
Quarterly Report for the fiscal quarter ended
April 29, 1994.
*4.26 Third Amendment to Rights Agreement dated December
16, 1994 between Registrant and First Union
National Bank of North Carolina, as Rights Agent,
filed as Exhibit 4(c)(5) to Registrant's Form 10-K
Annual Report for the fiscal year ended October
28, 1994.
*4.27 Credit Agreement dated as of March 15, 1996 among
Registrant, as Borrower, certain Lenders referred
to therein, NationsBank, N.A., as Agent, and
NationsBanc Commercial Corporation, as Disbursing
Agent, filed as Exhibit 2(a)(1) to Registrant's
Form 8-K Current Report dated March 15, 1996.
*4.28 Security Agreement dated as of March 15, 1996
between Registrant, as Grantor, and NationsBank,
N.A., as Agent for certain Lenders referred to
therein, and NationsBanc Commercial Corporation,
as Disbursing Agent, filed as Exhibit 2(a)(2) to
Registrant's Form 8-K Current Report dated March
15, 1996.
*4.29 Form of Deed of Trust and Security Agreement
(North Carolina property) dated as of March 15,
1996 between Registrant, as Grantor, TIM, Inc., as
Trustee, and NationsBank, N.A., as Beneficiary and
Agent for certain Lenders referred to therein, and
NationsBanc Commercial Corporation, as Disbursing
Agent, filed as Exhibit 2(a)(3) to Registrant's
Form 8-K Current Report dated March 15, 1996.
*4.30 Form of Mortgage and Security Agreement (South
Carolina property) dated as of March 15, 1996
between Registrant, as Grantor, and NationsBank,
N.A., as Beneficiary and Agent for certain Lenders
referred to therein, and NationsBanc Commercial
Corporation, as Disbursing Agent, filed as Exhibit
2(a)(4) to Registrant's Form 8-K Current Report
dated March 15, 1996.
*4.31 Deed to Secure Debt and Security Agreement
(Georgia property) dated as of March 15, 1996
between Registrant, as Grantor, and NationsBank,
N.A., as Beneficiary and Agent for certain Lenders
referred to therein, and NationsBanc Commercial
Corporation, as Disbursing Agent, filed as Exhibit
2(a)(5) to Registrant's Form 8-K Current Report
dated March 15, 1996.
*4.32 Form of Assignment of Factoring Proceeds dated
March 15, 1996, filed as Exhibit 2(a)(6) to
Registrant's Form 8-K Current Report dated March
15, 1996.
<PAGE>
EXHIBIT NUMBER Exhibit
*4.33 First Amendment dated May 10, 1996 to the Credit
Agreement dated March 15, 1996 among Registrant,
as Borrower, certain Lenders referred to therein,
NationsBank, N.A., as Agent, and NationsBanc
Commercial Corporation, as Disbursing Agent, filed
as Exhibit 2(a)(7) to Registrant's Form 10-Q
Quarterly Report for the fiscal quarter ended May
3, 1996.
*4.34 Waiver Agreement dated June 14, 1996 to the Credit
Agreement dated March 15, 1996 among Registrant,
as Borrower, certain Lenders referred to therein,
NationsBank, N.A., as Agent, and NationsBanc
Commercial Corporation, as Disbursing Agent, filed
as Exhibit 2(a)(8) to Registrant's Form 10-Q
Quarterly Report for the fiscal quarter ended May
3, 1996.
*4.35 Second Amendment dated September 12, 1996 to the
Credit Agreement dated March 15, 1996 among
Registrant, as Borrower, certain Lenders referred
to therein, NationsBank, N.A., as Agent, and
NationsBanc Commercial Corporation, as Disbursing
Agent, filed as Exhibit 2(a)(9) to Registrant's
Form 10-Q Quarterly Report for the fiscal quarter
ended August 2, 1996.
*4.36 Third Amendment dated January 30, 1997 to the
Credit Agreement dated March 15, 1996 among
Registrant, as Borrower, certain Lenders referred
to therein, NationsBank, N.A., as Agent, and
NationsBanc Commercial Corporation, as Disbursing
Agent.
5.1 Opinion of Schell Bray Aycock Abel & Livingston
P.L.L.C., counsel to the Company.
23.1 Consent of Ernst & Young LLP, independent
auditors.
23.2 Consent of Schell Bray Aycock Abel & Livingston
P.L.L.C. (included in exhibit 5.1).
24.1 Powers of Attorney (included on the signature page
hereof).
- -------------------------------------------
* Incorporated by reference to previous filing.
<PAGE>
[S-3 to come]
SCHELL BRAY AYCOCK ABEL & LIVINGSTON P.L.L.C.
ATTORNEYS AND COUNSELLORS AT LAW
SUITE 1500 RENAISSANCE PLAZA
230 NORTH ELM STREET
GREENSBORO, NORTH CAROLINA 27401
Exhibit 5
July 9, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Texfi Industries, Inc.
Registration Statement on Form S-3
Gentlemen:
We have represented Texfi Industries, Inc., a Delaware corporation,
(the "Company") in connection with the registration under the Securities Act of
1933 of up to 924,000 shares of the Company's Common Stock, $1.00 par value,
which may be offered and sold in accordance with the above-referenced
Registration Statement on Form S-3 by the selling stockholder described therein
(the "Selling Stockholder").
To opine as to the legality of the securities which may be offered and
sold by the Selling Stockholder, we have examined the Corporation's Certificate
of Incorporation, its Bylaws and such of its corporate records as we deemed
necessary for purposes of rendering this opinion, the Registration Statement
(Form S-3) relating to the offering referred to above, including the Prospectus
therein (the "Prospectus"), and the form of certificate of Common Stock. For
purposes of this opinion, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
originals of all documents submitted to us as certified, photostatic or
conformed copies, and the authenticity of the originals of such documents.
Based upon our review, we are of the opinion that all of the shares of
Common Stock which may be offered and sold by the Selling Stockholder as
contemplated by the Registration Statement and Prospectus are validly issued,
fully paid and nonassessable.
<PAGE>
Securities and Exchange Commission
July 9, 1997
Page 2
We hereby consent to the use of this opinion as Exhibit 5 of the
Registration Statement relating to the offering referred to above, as filed with
the Commission under the Securities Act of 1933 (the "Act"), and to any
reference to this opinion and to our firm name under the heading "Legal
Opinions" in the Prospectus. We do not, however, thereby admit that we are
within the category of persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
SCHELL BRAY AYCOCK ABEL & LIVINGSTON P.L.L.C.
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts"
in the Registration Statement (Form S-3) and related Prospectus of Texfi
Industries, Inc. for the registration of 924,000 shares of its common
stock and to the incorporation by reference therein of our report dated
December 9, 1996, except for Note 5 as to which the date is January 30,
1997, with respect to the consolidated financial statements and schedule
of Texfi Industries, Inc. included in its Annual Report (Form 10-K) for the
year ended November 1, 1996, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Raleigh, North Carolina
July 3, 1997
