Fruit of the Loom Sale to Buffett's Berkshire Hathaway Approved
By Jef Feeley
Wilmington, Delaware, Jan. 2 (Bloomberg) -- Warren Buffett's Berkshire Hathaway Inc. won a bankruptcy judge's approval of its $835 million bid to buy underwear maker Fruit of the Loom Inc.
U.S. Bankruptcy Judge Peter Walsh in Wilmington, Delaware, declared Berkshire's bid ``the highest and best offer.'' In fact, it was the only bid submitted at a Dec. 18 auction.
The decision clears the way for Fruit of the Loom to move forward with its bankruptcy reorganization plan, which uses the proceeds of the Berkshire sale to repay some creditors' claims. Walsh will decide whether to approve the plan in March.
``People can still come in and bid,'' Walsh said. ``If Bill Gates shows up at the confirmation hearing and offers $2 billion, we're going to say goodbye to Mr. Buffett,'' Walsh told lawyers at a hearing today.
``Nobody believes that's going to happen,'' he added. ``Unless something unusual happens, I suspect Berkshire is going to be the purchaser.''
Shares of Chicago-based Fruit of the Loom rose 2 cents to 25 cents. Class A shares of Omaha, Nebraska-based Berkshire Hathaway fell $1,300, or 1.7 percent, to $74,300.
Fruit of the Loom filed for Chapter 11 protection in Delaware in December 1999 after five straight losing quarters. The company was saddled with about $1.3 billion in debt.
The company struggled to compete with rivals who had moved production facilities overseas. Fruit of the Loom, which dates back to 1851, produces underwear and other apparel under its own name along with the BVD, Gitano and Wilson brands.
Under Fruit of the Looms' proposed recovery plan, lenders and other secured creditors would get 92.5 percent of the company and unsecured creditors would get 7.5 percent.
Lawyers for Fruit of the Loom bondholders said as many as seven other companies expressed an interest in bidding on the apparel maker, but were scared off after Berkshire entered the contest.
``The other potential bidders saw that Berkshire was the preferred bidder and had the inside track,'' said Bruce Bennett, a Los Angeles attorney representing bondholders. They wanted Walsh not to accept Berkshire's bid |
