Judge Dalis transferred the case to a South Carolina bankruptcy court because the primary assets and places of business of the mill's parent company, Spartan International Inc., are in that state.

Judge Dalis disagreed with the employees' lawyer, Louis Saul, that transferring the case would be a ''death knell to the employees.''

''I do not believe the petitioning creditors will benefit from having their case heard in this court, ultimately to be reversed, which would further delay their claims,'' the judge said. ''It is appropriate this case be transferred to the District of South Carolina.''

Some 54 former King Mill employees filed the petition in Augusta in May seeking extension of their medical benefits and wages from the assets of Spartan.

The company closed five plants in Georgia, South Carolina and North Carolina on May 4 when General Electric Capital Corp. foreclosed against a $35 million debt. About 1,200 employees were thrown out of work without the required 60-day notice and with no medical insurance or retirement funds.

Judge Dalis had ruled in June that the case would be heard in Augusta, but agreed to hear GE's request for reconsideration and Spartan's motion to move the case to South Carolina. He said his earlier ruling was based on insufficient information from both GE and the employees' lawyers.

A South Carolina judge previously found the employees in contempt for filing the bankruptcy petition after she had appointed a receiver to dispose of Spartan's assets, but the 4th Circuit Court of Appeals disagreed and put the case back in Judge Dalis' court.

Reach Sylvia Cooper at (706) 823-3228 or sylviaco@augustachronicle.com.