NEW YORK — Arthur S. Levine, chairman of the Sassco Fashions division of The Leslie Fay Cos., wants to buy Sassco, but his chances are uncertain.

Levine’s interest came to the fore in a bankruptcy court hearing here Thursday, where Michael J. Babcock, president and chief operating officer of Leslie Fay, testified as to the need for new contracts and incentive compensation plans for four of the company’s key executives. When asked by Judge Tina Brozman why Levine was not among the group, Babcock said that Levine was not interested in signing a long-term contract because he wanted to buy the division he heads.

Sassco makes the Kasper for ASL suit and dress lines, the Kasper Sport collection and Le Suit line. The division is Leslie Fay’s largest, with a volume last year of about $350 million, and reportedly is its most profitable.

Contacted at his office, Levine said Babcock’s statement was true. He said his desire to buy the division was “in light of recent developments,” referring to the company’s accounting scandal, which emerged last year and forced the firm to file Chapter 11 in April 1993.

Levine, the unit’s founder who sold the company to Leslie Fay 11 years ago, said he “couldn’t say” when such a buyout might occur, but “I hope it will come to pass.” He wouldn’t comment further, but sources close to the firm said he has already put together investors with the proper financing.

A spokesman for Leslie Fay said while Levine has expressed interest in buying the division, which has always operated as a separate firm, the company has not expressed any interest in selling it, nor are any such negotiations in progress.

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