Buffett backs off Burlington buy
By Furniture Today Staff -- Furniture Today, March 9, 2003
Greensboro, N.C. — Berkshire Hathaway has withdrawn its $579 million cash offer to buy bankrupt textiles maker Burlington Inds. after a bankruptcy court nixed a $14 million break-up fee Berkshire wanted Burlington to pay if the deal fizzled.
"It's unfortunate the break-up fee was not accepted by the court and the offer has been substantially withdrawn by Berkshire. It was a firm cash offer that would have been good for the company, our employees and our creditors," said George Henderson III, chairman and chief executive officer of Burlington.
"We're sorry to have to terminate our offer," said billionaire Warren Buffett, chairman of Berkshire Hathaway, which owns several furniture retailers. "We admire the Burlington team and hope the company can emerge from bankruptcy debt free."
Rival bidder WL Ross & Co., the lead member of Burlington's creditor's committee, vigorously opposed Buffett's offer, which would have paid unsecured creditors about 35 cents on the dollar, saying its own offer would pay unsecured creditors around 45 cents.
Burlington manufactures and markets soft goods for apparel and interior furnishings. The company has operations in the United States, Mexico, India and Hong Kong.
When the company entered bankruptcy in November 2001, it was more than $1 billion in debt.
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