This story first appeared in the November 12, 2003 issue of WWD. Subscribe Today.
- BURLINGTON’S NEW DEAL: W.L. Ross & Co., the new owner of Burlington Industries, said Tuesday that the company had secured a new $85 million asset-backed credit line from CIT Business Credit Inc. On Monday a Delaware Bankruptcy Court judge approved W.L. Ross’ $614 million takeover deal for the textile mill, as reported, a package that included the sale of Burlington’s Lees Carpets unit to Mohawk Industries. Burlington filed for Chapter 11 protection on Nov. 15, 2001. In a statement, Wilbur Ross, chairman of W.L. Ross and Burlington, said, “The Burlington employees who have remained loyal during the bankruptcy to the new company no longer have to worry about the solvency of their employer.”
- CIAO CHURCH’S: Prada said Tuesday it has finalized the sale of 55 percent of the British footwear firm, Church’s, to Swiss Equinox Investment, as chief executive Patrizio Bertelli announced last week. The price was not disclosed. The stake adds 10 percent to the original 45 percent stake Equinox agreed to purchase in a preliminary agreement last April. Prada said it will continue to oversee production and design for the brand, but the deal marks a partnership with Equinox for Church’s commercial and industrial development.
- FRIEDMAN’S SEC WOES: Jewelry retailer Friedman’s Inc. said on Tuesday that the Securities and Exchange Commission has made official what had been an informal investigation into the fraud allegations filed in a lawsuit against former Friedman’s vendor Cosmopolitan Gem Corp., Friedman’s and other defendants by Cosmopolitan’s former factor, Capital Factors. In other news, the retailer said its bad debt allowance will increase to between 14 to 17 percent of accounts receivable as of Sept. 27 versus a previous target of 10.5 percent. Friedman’s also said the estimate could change. Separately, the retailer’s board placed chief financial officer Victor Suglia on leave of absence and is considering alternatives regarding an interim cfo.
- PROLONGING THE LITIGATION: Rite Aid Corp. has sued its former president, Timothy Noonan, seeking reimbursement of legal fees, compensation and severance payments doled out to the executive. Rite Aid contends that Noonan violated agreements with the firm when he cooperated with federal investigators and, in July 2002, pleaded guilty to charges of withholding information in Rite Aid’s mammoth accounting scandal. Published reports indicated Rite Aid wouldn’t disclose the amount of damages being sought except to call it “substantial.” The company intends to seek damages from other executives who pleaded guilty in the case, the reports said.