Burlington Seeks More Time to Assemble Chap 11 Pla

Greensboro, NC, June 3--Burlington Industries Inc. has made progress in its Chapter 11 case, but the clothing company still needs more time to stitch together a modified reorganization plan. Burlington Industries said it wants to prevent other parties from filing competing plans for its reorganization until Sept. 30 and has asked to have until Nov. 30 to solicit votes for its plan, according to court papers. The exclusive period to file a plan ended Saturday, but the company filed its motion seeking more time May 30, automatically extending the period. Burlington has already filed a Chapter 11 plan, but will need to modify it based on the results of an auction of its assets, court papers said. The U.S. Bankruptcy Court in Wilmington, Del., wants objections to Burlington Industries' request for more exclusivity to be filed by June 9, but doesn't plan to hold a hearing on the matter until July 31. If the request is approved, it would be the company's fourth exclusivity extension. Burlington Industries said it needs the additional time because, after Berkshire Hathaway Inc. terminated its plan to buy the company for $579 million in February, it had to change bid rules for the proposed auction of its business. Burlington Industries now expects the auction to be held July 21, so it won't be able to ask for court approval of a disclosure statement outlining terms of its restructuring plan until after that, the motion said. During the proposed four-month extension, the company needs to complete the sale process, prepare and gain approval for its disclosure statement, negotiate and get confirmation for its plan, close and liquidate certain facilities, and continue to operate the business, court papers said. Considering the amount that must be done, a four-month extension would be "relatively modest," the motion said. As reported, Burlington Industries recently received court approval to hire two investment banking firms to assist it in soliciting bids for its assets. The investment banks would share $2 million, as well as 2.5% of any bid of more than $579 million, should a bidder they contacted eventually purchase Burlington Industries. Burlington Industries filed for bankruptcy protection in November 2001, listing assets of $1.2 billion and liabilities of $1.1 billion.

Related Topics:Shaw Industries Group, Inc.

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