Court Denies Bid to Block Cone Mills Sale
WILMINGTON, Del. (AP) _ The last potential obstacle to the sale of the assets of Cone Mills Corp. to WL Ross & Co. was removed Friday, when the court overseeing the denim maker’s bankruptcy case refused a request to reconsider a ruling approving the deal.
Chief U.S. Bankruptcy Judge Mary F. Walrath said delaying the sale could mean immediate job loss for Cone Mills workers being hired on with the new denim operation, as well as trouble for suppliers who had extended credit in anticipation of the W.L. Ross deal.
The judge said there was no clear error of fact in her Feb. 11 decision approving the sale, product of a January auction conducted in the company’s Chapter 11 case.
No other bidder stepped up to counter W.L. Ross’s offer of $46 million in cash for the Greensboro, N.C., company, plus the assumption of liabilities.
``The marketplace has spoken, has it not?″ Walrath said.
Friday’s ruling went against secured bondholders and a panel representing shareholders, who say Cone Mills downplayed its value to win approval of the sale to W.L. Ross at an unfairly low price.
Given the value of its inventory and accounts receivable, Cone Mills would bring more at liquidation than it did at the auction, Richard Engman, attorney for the bondholders, said.
Engman said W.L. Ross had extensive advantages that would intimidate others out of the bidding, including months to examine the company’s condition before the bankruptcy while he negotiated with Cone Mills’ board over a potential purchase.
Andrew Rosenberg, attorney for Cone Mills, told Walrath Friday that the sale to W.L. Ross is ``on the cusp of closing.″
Cone filed for Chapter 11 protection in September.
W.L. Ross also bought Cone rival Burlington Industries, also based in Greensboro, out of bankruptcy for $614 million in November, and wants to merge the denim operations of the two companies.