Charlotte, NC, Feb. 25--A committee in the Cone Mills Corp. bankruptcy case failed to meet a midnight deadline to post a $35 million bond that would have stalled the sale of the Greensboro, NC based denim maker to WL Ross & Co.
The money would have compensated Cone Mills for any losses resulting from a delay in the sale sought by bondholders who thought Ross's bid was too low.
"The bottom line is that they did not put up a bond," Wilbur Ross, chairman of the New York investment firm, said Tuesday in a telephone interview. "We're now getting organized to close the transaction."
Cone Mills issued a brief statement Tuesday stating that the committee hadn't met the deadline to block the sale. Cone Mills, which filed for bankruptcy on Sept. 24, opposed the committee's efforts to stop the sale.
An attorney for the bondholders' committee couldn't be reached for comment; a telephone number for his office in New York had been disconnected.
Bankruptcy Judge Mary F. Walrath, in a hearing last week in Wilmington, DE, granted the committee's request to postpone the sale on the condition it post the bond by Monday.
The money would compensate Cone Mills for any losses that result from a stay.
Committees representing Cone bondholders and shareholders have opposed the sale, calling Ross' $90 million offer for Cone inadequate.
The three-member bondholders committee had faced a tight deadline to come up with the money. By failing to post the bond, it allows Ross to go ahead with his plans to buy the company.
The committee also filed a motion asking Walrath to reconsider her original order approving the sale, Ross said.
Ross, who also bought Greensboro-based Burlington Industries out of bankruptcy for $614 million, wants to merge the denim operations of the two companies.
"This has been a very bumpy road and whether there's another speed bump ahead I don't know," he said. "I've said all along I was very skeptical whether these fellows would ever put up any money."
