Judge Approves Ross Bid for Bankrupt Burlington Industries

A revised agreement for financier Wilbur Ross to buy bankrupt Burlington Industries for $614 million received a judge's approval Friday, allowing the textile company to continue its reorganization plan. The bid will be included in Burlington's plan to emerge from bankruptcy and related disclosure statement, which includes claims against the company and how they have been resolved. The bankruptcy court will review those two documents some time in late August, company spokeswoman Delores Sides said Friday. Friday's approval "allows us to include the bid in the plan of reorganization so it can be reviewed by the court and sent to the creditors," she said. Negotiations continued Thursday night after U.S. Bankruptcy Court Judge Randall Newsome in Wilmington, Del., threw out a $6.08 million breakup fee that was part of the bid by Ross' investment firm, W.L. Ross Inc. LLC. The new agreement includes the breakup fee, but only if someone else comes forward and outbids Ross for the company, Ross told the News amp; Record of Greensboro on Friday. If Ross' deal simply falls through, no breakup fee would be included, he said. Ross had bid $620.08 million for the company. The final purchase price is subject to adjustments, including a $28.6 million price reduction that Newsome approved to cover $44 million worth of underfunded pension liabilities W.L. Ross is assuming with the sale. If the court approves the reorganization and disclosure statement, Burlington's creditors will vote on the plan. Burlington will present the result of that vote during a confirmation hearing, which the company expects to take place in October. Ross hopes to complete his acquisition of Burlington in October and bring it out of bankruptcy as a private company with little or no debt. Burlington owes about $680 million. As part of his bid, Ross agreed to sell the Lees carpet division to carpet maker Mohawk Industries of Calhoun, Ga., for $352 million. Lees is Burlington's most profitable business. Ross has said he would try to keep the rest of the company intact. The auction for Burlington Industries took place after a proposed $579 million sale to Warren Buffet's Berkshire Hathaway Inc. fell through in February. Burlington Industries filed for bankruptcy protection in November 2001, listing assets of $1.2 billion and liabilities of $1.1 billion. Since it declared bankruptcy, Burlington has trimmed its work force from 13,500 to about 7,000 in hopes of returning a profit. Burlington was once the world's largest textile company with 80,000 employees and 149 plants.