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Non-Tech : FTL- Fruit of the Loom
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To: Clement who wrote (112)8/11/2001 7:30:04 AM
From: Arthur Tang  Read Replies (1) of 161
 
Bankruptcy court operations(trustees and judges) are not quite likely to approve asset sales if FTL has cash to continue operation. Secured debtor owns the company and does not have to take a hair cut, they can put up more small cash or credit for the company to draw on.

FTL a year ago was not using all the credit allowed by banks. The reorganization plan have the secured debtor to come up with another $300 million cash while the revenue deteriorated; so it was a no go. Presently, the company is trying for a going concern approach to sell a going business, which has to include maybe part of the debt. Depending on X'mas sales, the banks may not want a haircut if Greenspan has liberal monetary policy to support going(maybe going out) businesses. Banks don't like $1.2 billion minus the asset sale revenue haircuts, when they only have to put in $100 million or less to keep it going until economy recovers. In other word it will drag on until the price is right or the company needs more cash. Which ever comes first does not matter.

Market makers are clearing inventory(oversold in the process) and have to buy back shorts because the stock is not cancelled until it is cancelled. People are still selling the stock and may need clearing inventory again. Sudden death can be a possibility, however.
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