Burlington Industries says unsecured creditors to receive 40% recovery

By Carlise Newman

Chicago, July 25 - Burlington Industries Inc. said it estimates unsecured creditors will receive a recovery of 40% after its reorganization plan is implemented and that secured creditors will be repaid in full.

Burlington announced that W.L. Ross & Co. LLC's $608 million acquisition proposal has been designated the highest of several bids received in the sale process approved last May by the court in its reorganization process.

The acquisition by W.L. Ross will include the sale of Burlington's Lees carpet business to Mohawk Industries Inc.

Other qualified bidders will have the opportunity to top the Ross proposal at an auction, expected to be held on July 28. The auction will allow a breakup fee of 1% of the purchase price and bidding increments of $3 million. As a result, all competing bids must exceed the Ross bid by that amounts.

The auction results are expected to be submitted for court approval at a July 31 hearing. The reorganization would then need to be approved by Burlington's creditors.

If the Ross bid proceeds, the parties expect a closing in October.

Burlington is a Greensboro, N.C. fabric maker.

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