Burlington gets court approval to sell more assets

By Staff -- Home Textiles Today, 10/4/2002 2:51:00 PM

Greensboro, NC — A U.S. bankruptcy court has given textiles producer Burlington Industries Inc. an okay to sell off more of its assets to raise cash and pay down debt.

The court allowed Burlington to modify its debtor-in-possession financing to increase asset sales by $31.3 million, from an earlier cap of $50 million, and to pay down $33.7 million of the principal on its pre-petition secured loan.

Burlington also said it has reduced the amount of maximum available borrowings and the accompanying commitment fee to $100 million.

The company said that since filing for Chapter 11 last November, it has generated a substantial amount of cash and has fully repaid borrowings of $95 million drawn against its DIP financing. Burlington said it has sufficient liquidity to fund operations and is acting to cut its interest costs by making the $33.7 million payment on pre-bankruptcy debt.

In a separate move, the court gave Burlington a four-month extension of its exclusive period in which to file a plan of reorganization. The extension request was the company's second. In court papers, Burlington said it will use the extension to evaluate a recently implemented business plan and analyze claims.