Burlington Industries Files For Chapter 11
Citing a heavy debt load coupled with unfair competition from cheap imported textiles as well as a slowdown in consumer spending, Burlington Industries Inc. filed for voluntary Chapter 11 reorganization in the U.S. Bankruptcy Court, Wilmington, Del.
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Citing a heavy debt load coupled with unfair competition from cheap
imported textiles as well as a slowdown in consumer spending,
Burlington Industries Inc. filed for voluntary Chapter 11
reorganization in the U.S. Bankruptcy Court, Wilmington, Del.
The petition, which includes only U.S. operating divisions and
subsidiaries of Burlington, listed total assets of $1.18 billion
against $1.1 billion in debts. Creditors include outdoor industry
suppliers KoSa, owed $1.2 million, and Wellman, owed $141,000.
According to Douglas McGregor, president and CEO of Burlington, the
company has approximately $60 million in cash on hand as of the filing
and a commitment for up to $190 million in debtor-in-possession (DIP)
financing underwritten by J.P. Morgan Chase & Co. The DIP funds
require court approval and will make additional monies available to
Burlington if needed during the restructuring process.
Not included in the petition are non-U.S. subsidiaries, joint venture
partnerships, Burlington WorldWide Limited ( a recently formed Hong
Kong subsidiary), and Nano-Tex LLC (formed three years ago to develop
advanced proprietary fabric technology).
Burlington branded fabrics used by outdoor and fitness industry
companies include: M.C.S. Blocker, M.C.S. with Nano-Dry, MET Coolmax,
Micromove, Nano-Care, Nano-Dry, and Nano-Pel.
VF Corp layoffs (see story below), Burlington reorg, and rumors about
Malden troubles (SNEWSÂ®Â will have the story for you when there’s an
accurate one to tell) — it’s not a pretty picture for the U.S.
apparel/textile industries. Expect more restructuring and reorganizing
over the next few months as the slower economy coupled with accusations
of Asian-based dumping of textiles and apparel causes ripples to turn
into waves in all sectors. One glimmer of hope amid all the chaos:
Specialty retailers in many areas of the country are telling SNEWSÂ®Â that
technical fleece is selling strongly off the shelves for the first time
in well over a year. Could it be that consumers are finally realizing
that disposable fleece isn’t worth the time or money? Also, despite
related woes among fitness equipment companies, manufacturer Cybex is
making a strong comeback from dismal financial times. Maybe the right
strong-handed management coupled with truly conservative growth is the