USA: Berkshire's $579m Battle For Burlington Hots Up
Troubled textile giant Burlington Industries Inc on Wednesday filed a proposed Chapter 11 plan based on Warren Buffett's $579 million bid, although he faces stiff competition from rival bidder WL Ross & Co.
The plan provides for Buffett's Berkshire Hathaway Inc to buy all of Burlington's equity in exchange for the cash offer with the monies used to pay off its creditors.
However, Burlington wants to hold an auction for other interested parties in April while WL Ross chief, Wilbur Ross, yesterday called on the firm to reconsider its decision to go with the Berkshire bid and warned of possible litigation.
WL Ross is the lead member of Burlington's creditor's committee and has also proposed a way to bring it out of Chapter 11 which it entered in late 2001 under $1.1 billion of debt amid a wave of cheap textile imports.
"Buffett is famous for buying dollar bills for 50 cents," Ross said. "We believe his offer is inadequate and apparently so do a number of other unsecured creditors."
He added holders of more than $120m of unsecured claims have told him to reject the bid.
Companies: Berkshire Hathaway Inc
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