WP Wrangling Continues
By Brent Felgner -- Home Textiles Today, 1/9/2006
NEW YORK — The continuing contest over the sale terms of WestPoint Stevens to affiliates of Carl Icahn will resume in a federal bankruptcy courtroom Tuesday even as its successor, WestPoint Home, apparently continues to downsize its operations, including at its New York offices.
The company declined comment on a small number of layoffs — perhaps 25 or so support and some product management staff — however, by mid-week news had become almost common knowledge around the trade. Many along Fifth and Sixth Avenues, including a few insiders, were apparently still waiting for the other shoe to drop at the end of last week.
In the meantime, the wrangling between Icahn and the Steering Committee of First Lien Lenders is back in court where WestPoint, Icahn and the Steering Committee are still trying to settle on the form of payouts to first tier secured lenders.
Ruling on an appeal of the original sale decision, a federal district court judge in November threw out some provisions of the Asset Purchase Agreement and sent the case back to bankruptcy court to fashion a better remedy. Icahn is seeking a further appeal of the district court decision.
Among the issues to be argued Tuesday is how securities used to pay down the WestPoint Stevens estate should be disposed of.
“The District Court clearly envisions some kind of process in which all or a portion of the securities are sold for cash, which is then distributed to members of the Steering Committee to the extent necessary to satisfy their claims,” WestPoint's most recent court filing stated.
