Greensboro, NC, Aug. 26--Burlington Industries Inc. received preliminary approval of the disclosure statement outlining terms of its Chapter 11 bankruptcy reorganization plan Monday.
The U.S. Bankruptcy Court in Manhattan sought some minor "process-related changes," but the textile company still expects to be able to mail out a ballot for creditor support Friday, company spokeswoman Delores Sides said Monday.
Burlington expects to present the changes the court requested on Tuesday for review and final approval, she said.
Approval of a disclosure statement in a bankruptcy proceeding is considered a substantial step toward approval of a Chapter 11 plan.
Burlington, which filed for bankruptcy in November 2001, has received court approval to sell substantially all its assets to buyout firm W.L. Ross & Co. for $614 million and assumption of some liabilities.
The company's Chapter 11 liquidation plan, which centers on establishing a trust to distribute proceeds from the Ross deal, would give unsecured creditors with claims totaling $405 million to $425 million a recovery of about 42 percent in cash, the disclosure statement said. Burlington's 53.5 million common shares would be canceled under the plan, with equity holders receiving no distribution.
