Foamex International Inc., one of the nation's largest foam-cushioning manufacturers, and Sleep Innovations Inc. said they have settled a lawsuit.

According to the companies, mattress-maker Sleep Innovations Inc. will pay $12 million to Foamex, based in Linwood, Delaware County. The money was for products received by Sleep Innovations, which had withheld payment pending the outcome of the litigation.

With the confidential settlement, the companies have agreed to dismiss their claims in federal court in Philadelphia.

"This agreement eliminates the expense and distraction associated with the ligitation and allows us to concentrate on our business priorities," Foamex President and CEO Jack Johnson said in a statement.

Foamex shares were up 6 cents to $2.08 in morning pink sheet trading.