Tropical Sportswear creditors committee objects to liquidation plan

By Caroline Salls

Pittsburgh, May 11 - Tropical Sportswear International Corp.'s official committee of unsecured creditors filed an objection Tuesday to the company's plan of liquidation, according to a filing with the U.S. Bankruptcy Court for the Middle District of Florida.

The committee said the plan wrongly limits potential recoveries for the liquidating trustee as a result of potential "causes of action" against Tropical Sportswear's officers.

"Specifically, the liquidating plan caps the liability of the officers with respect to the causes of action to whatever is available under [some] director and officer insurance policies, thereby effectively releasing the officers from any liability," the filing said.

The committee also said the plan seeks to release the company from all claims against it.

As previously reported, the plan distributes Tropical Sportswear's $60 million of cash to creditors, with secured, administrative and priority claims to be paid first along with any amounts owing under the debtor-in-possession facility.

A hearing on confirmation of the plan is scheduled for May 18.

Perry Ellis International, Inc. announced Feb. 28 that it completed the acquisition of the domestic operating assets of Tropical Sportswear International and the outstanding capital stock of Tropical Sportswear's U.K. subsidiary for $88.5 million in cash.

Tropical, based in Tampa, Fla., filed for bankruptcy on Dec. 16, 2004. Its Chapter 11 case number is 04-24134.

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