NEW YORK — With just a week before its plan of reorganization is due, Warnaco Group is addressing the issue of its post-bankruptcy leadership.
According to sources, Melanie Kusin, managing partner at Heidrick & Struggles, has been retained to find a president of the Warnaco Group. Reportedly, the role would start as a transitional one, but ultimately would include the post of chief executive officer after Antonio Alvarez, Warnaco’s president and ceo, submits the reorganization plan, due Sept. 30, and the company emerges from bankruptcy, which it entered on June 11, 2001.
Sources believe eventually, Alvarez would return to Alvarez & Marsal, the turnaround and restructuring firm he heads with Bryan Marsal.
A Warnaco spokesman said Friday, "We have no comment." Kusin was traveling on the West Coast Friday and couldn’t be reached for comment.
However, sources indicated an executive is being sought to oversee the activities of Warnaco’s various divisional presidents: Roger Williams, president of Authentic Fitness; Kathy Van Ness, president of the designer swim division; Tom Wyatt, president of the Intimate Apparel Group; and John Kourakos, president of the Sportswear group.
Even though Warnaco has stressed that it intends to emerge as a stand-alone business, the sources noted, bids for parts of the company will occur after it emerges from bankruptcy.
"The bidding doesn’t even start until they file a reorganization plan," one source said. "Then VF can look at the Calvin Klein Jeans and Underwear. They want to know first where Warnaco values it, and then they can start the bidding. Everybody wants something."
As reported, VF Corp. is interested in bidding for Warnaco’s intimate apparel division and its Calvin Klein jeanswear business. Besides VF, Lawrence Stroll and Silas Chou have indicated on several occasions they are interested in buying the entire Calvin Klein business.
In a story earlier this year, Alvarez told WWD,"I am very committed to take this company through a plan of reorganization to get the best value for all constituents, to get the best answer for the business and the brands and to reorganize around the best set of properties we can go with."While the market waits to see the content of Warnaco’s reorganization plan, professional fees in its bankruptcy case have reached at least $28.5 million.
On Wednesday, Manhattan Bankruptcy Court Judge Richard Bohanon approved several interim fee applications for all professionals working on the case for the four months ended June 30.
Among the fees and expenses approved for Warnaco’s legal teams: Sidley, Austin, Brown & Wood, bankruptcy counsel, $2.2 million in fees and $178,958 in expenses, with totals to date of $6.4 million and $491,750, respectively, and Skadden, Arps, Slate, Meagher & Flom, long-time corporate counsel, $1.2 million in fees and $132,228 in expenses and totals to date of $6.6 million and $833,092, respectively.
Among Warnaco’s financial advisers, Deloitte & Touche, its auditor, was awarded fees at $2.7 million and expenses of $44,782 with fees to date of $4.4 million and expenses of $84,726. BDO Seidman, which provided accounting support, was awarded $399,033 in fees and expenses of $24,248, bringing total fees so far to $1.3 million and expenses to $75,888. Bear, Stearns & Co., Inc., investment adviser, received approval for fees totaling $600,000 and expenses of $56,714; its total fees to date are $1.4 million and expenses are $266,447.
The beleaguered Arthur Andersen accounting firm, which was Warnaco’s financial adviser at the start of the bankruptcy but resigned in May, received a final fee award of $199,746, with expenses of $5,606. Total fees came to $1.6 million and expenses were $48,322.
Otterbourg Steindler Houston & Rosen, legal counsel to Warnaco’s official committee of unsecured creditors, was awarded $432,614 in fees and $20,540 in expenses, lifting total fees to $1.8 million and expenses to $86,737.
In another high-profile bankruptcy matter, the Chicago judge overseeing the Kmart case last week approved $22 million in professional fees for the first three months of work on the case. Approved expenses for the attorneys and other advisers involved in the bankruptcy, which began in January 2002, so far have reached $2.6 million.
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