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Non-Tech : FTL- Fruit of the Loom

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To: Clement who wrote (121)	8/14/2001 5:01:09 PM
From: Clement	Read Replies (1) of 161

Arthur - you should like this article: "Why Chapter 11 can be a good thing".... cbs.marketwatch.com There are however differences between Covad's situation and FTL's -- first off, there is a 100% probability that the secured debt holders for FTL would get their money back in a sale (which is a couple hundred million if I recall). The other unsecured senior debt while they would get a haircut would still retrieve a substatial portion of their capital. The question then is -- how risky do the debt holders think that it would be to let FTL emerge from bankruptcy on the hope that things would return to sufficiently high profitability levels? I'm not sure I would take that bet, although I'm sure there are vultures that might (which is why they generage the venture capital like returns). The problem is that there are significant underlying problems that have not yet been corrected -- ie FTL just can't produce t-shirts and underwear cheap enough in the marketplace. Operating under Chapter 11 only goes to heighten the uncertainty for the company as customers and employees alike defect. Clement

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