Fruit of the Loom files for Chapter 11

Published 12:00 am Wednesday, December 29, 1999

AP and staff reports

Underwear and apparel maker Fruit of the Loom Ltd. filed for Chapter 11 bankruptcy protection Wednesday afternoon.

The company, which was organized in Delaware, filed the papers in U.S. Bankruptcy Court in Wilmington, Del.

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Chapter 11 allows a company to hold off its creditors while it tries to put its finances in order. Fruit of the Loom has 40,000 employees worldwide, including about 400 at Vidalia Apparel, its distribution center in Vidalia, La.

Fruit of the Loom spokesman Joel Weiden said the company has lined up $625 million in financing through Bank of America to enable it to continue operating. The financing still must be approved by the court.

”The company will ask the court for permission to continue to pay employees salaries and benefits and to continue to purchase materials and inventory,” he said.

In a press release, the company said the reorganization should have little effect on its customers and employees.

&uot;I haven’t gotten any word on that and can’t comment,&uot; said Marsha Colson, a spokesman for Vidalia Apparel.

Calls to media relations personnel at the company’s Chicago headquarters went unreturned Wednesday.

Fruit of the Loom’s stock price closed at $1.25 Tuesday, and trading of the stock was frozen Wednesday pending the bankruptcy announcement. The stock steadily declined from a high of $20 a share in January.

Vidalia Mayor Hyram Copeland said he had not heard about the bankruptcy as of late Wednesday afternoon and couldn’t speculate how it would affect the future of Vidalia Apparel.

&uot;We’ll just have to wait and see what takes place,&uot; Copeland said.