Tropical Sportswear liquidation plan confirmed

By Caroline Salls

Pittsburgh, May 25 - Tropical Sportswear International Corp.'s plan of liquidation was confirmed Tuesday by the U.S. Bankruptcy Court for the Middle District of Florida.

According to its disclosure statement, Tropical Sportswear has $60 million of cash that will be distributed to creditors.

Under the plan, secured, administrative and priority claims will be paid first along with any amounts owing under the debtor-in-possession facility. As of the date the disclosure statement was prepared, CIT, the DIP agent, has no liens on any of the company's property other than cash held as collateral for letters of credit.

Tropical Sportswear will also repay in full the customs bond agent, which currently holds $5.3 million of the company's cash. After debt to the U.S. Customs Service is paid, any extra cash will be released.

Next in line are the unsecured creditors with a total of $110 million in claims, including the $105.36 million owing on Tropical Sportswear's $100 million principal amount of 11% senior subordinated notes due 2008.

Unsecured creditors with claims below $2,000 or who are willing to reduce their claim to $2,000 can choose to be treated as convenience claims, which will be paid at the rate of 40% in cash.

Other unsecured creditors will receive the company's cash, either immediately or subsequently via a liquidating trust that will be created to handle distributions.

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.