Judge Approves Burlington Auction

Greensboro, NC, Mar. 7--A federal judge has ordered that textile maker Burlington Industries go up for auction again. Judge Randall Newsome on Wednesday approved a new auction less than a week after billionaire investor Warren Buffett walked away from his plan to acquire the bankrupt firm for $579 million. Wilbur Ross, a New York financier who opposed Buffett's plan, said he believes the new process will be better for the company and its creditors. Ross also has made an offer for Burlington. "I think there was a lot of confusion after Buffett walked away, but there's no way Burlington's going to go down the drain," Ross said. "No one's going to let something worth several hundred million go down the drain." Buffett's plan was attractive because it provided an avenue for the company to exit bankruptcy protection. But Buffett withdrew the bid when a federal judge rejected a protective breakup fee that made it more difficult for other suitors to outbid him. Under the auction's procedures, suitors have until May 28 to submit a bid for Burlington's reissued stock or for all the company's assets. Then, they will have an opportunity to outbid one another in a June 3 auction. Under the auction process Burlington was seeking last week, Buffett's company, Berkshire Hathaway, would have been a lead bidder in an auction. The new process differs by not allowing a lead bidder.

Related Topics:Shaw Industries Group, Inc.

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