SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 7, 2003
Burlington Industries, Inc.
(Exact Name of Registrant)
Delaware 1-10984 56-1584586
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(State of Incorporation) (Commission File Number) (IRS Employer ID No.)
3330 West Friendly Avenue
Greensboro, North Carolina 27410
(Address of Principal Executive Offices)
Registrant's telephone number: 336-379-2000
ITEM 5. Other Events.
On April 7, 2003, Burlington announced that the Bankruptcy Court has
extended Burlington's period of exclusivity to solicit acceptances of its plan
of reorganization through July 31, 2003 and has approved modified bidding
procedures for soliciting offers to acquire Burlington in the previously
announced auction process. Copies of the press release and the modified bidding
procedures, under which qualified bidders will be required to submit binding
proposals by July 10, 2003, are attached as Exhibits 99.1 and 99.2,
respectively.
ITEM 7. Financial Statements and Exhibits.
See attached exhibit index.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
BURLINGTON INDUSTRIES, INC.
By: /s/ JOHN D. ENGLAR
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Name: John D. Englar
Title: Senior Vice President, Corporate
Development and Law
Dated: April 7, 2003
INDEX TO EXHIBITS
Number Exhibit
99.1 Press release, dated April 7, 2003.
99.2 Modified bidding procedures.
Exhibit 99.1
Burlington Continues Progress in Emergence Process
GREENSBORO, N.C., April 7 /PRNewswire-FirstCall/ -- Burlington Industries, Inc.
(OTC Bulletin Board: BRLG - News) reports that it is continuing its progress
towards emerging from Chapter 11 reorganization this summer. The Court has
extended the Company's period of exclusivity to solicit acceptances of its plan
of reorganization through July 31, 2003 and approved the Company's motion for
modified bidding procedures for the solicitation of offers to purchase the
Company.
Under the approved bidding procedures, the deadline for bids to purchase the
Company will be July 10, 2003 with the auction for qualified bidders to be held
on July 21, 2003. The Company has hired Miller Buckfire Lewis & Co., LLC, an
investment banking firm, to oversee the bid solicitation and auction process.
These amended procedures and retention of an investment banker will assure a
more comprehensive sale and auction process. The Company's secured bank lenders
and the Official Committee of the Unsecured Creditors joined the Company in
seeking the Court's approval of the modified procedures.
"We have made significant progress and continue to move forward in our emergence
process," said George W. Henderson, III, Chairman and Chief Executive Officer.
"The modified bidding procedures established today strengthen our solicitation
process and provide further assurance that the resulting outcome will be the
best for the Company and our creditors.
"Over the last 17 months we have aggressively transitioned the Company and
implemented a new business model that expands and strengthens our capabilities
through more focused North American assets, expanded product and global
capabilities of Burlington WorldWide and differentiated fabric performance
developed by Nano-Tex. In addition, we have repaid $140 million of debt during
this period and will seek court approval to repay another $50 million next
month. Through the tremendous efforts of our employees and support from our
customers we are achieving our reorganization objectives and are positioned well
as we enter the final stages of our emergence."
With operations in the United States, Mexico and India and a global
manufacturing and product development network based in Hong Kong, Burlington
Industries is one of the world's most diversified marketers and manufacturers of
softgoods for apparel and interior furnishings.
This press release contains statements that are forward-looking statements
within the meaning of applicable federal securities laws and are based upon the
company's current expectations and assumptions, which are subject to a number of
risks and uncertainties that could cause actual results to differ materially
from those anticipated. Such risks and uncertainties include, among other
things, global economic activity and the implications thereon of the attack on
September 11 and the U.S. government's response thereto and the armed conflict
with Iraq, the success of the company's overall business strategy including
successful implementation of the company's restructuring plan and the company's
development of a global sourcing structure, the demand for textile products, the
cost and availability of raw materials and labor, governmental legislation and
regulatory changes, and the long-term implications of regional trade blocs and
the effect of quota phase-out and lowering of tariffs under the WTO trade
regime, the impact that the company's Chapter 11 proceeding has had or may have
on the company's relationships with its principal customers and suppliers, the
nature of the capital structure which is approved in the company's plan of
reorganization and the company's ongoing ability to finance its operations and
restructuring activities, the cost of future capital sources, and the exposure
to interest rate and currency fluctuations, the company's ability to utilize tax
loss carryforwards and retain tax refunds received or to be received, and other
factors identified in Burlington's filings with the Securities and Exchange
Commission.
Exhibit 99.2
MODIFIED BIDDING PROCEDURES
Set forth below are the bidding procedures (the "Bidding
Procedures") to be employed with respect to the Acquisition Agreement (the
"Agreement") for the sale, pursuant to the Joint Plan of Reorganization (as it
may be amended, the "Plan") of Burlington Industries, Inc. (the "Company"). The
Agreement provides, alternatively, for the sale of all of the issued and
outstanding capital stock of the reorganized Company or the sale of
substantially all of the assets of the Company (either such sale referred to
herein as a "Transaction"). Qualified Bidders (as hereinafter defined) will be
required to designate a particular form of Transaction in their final bids.
The Company and/or its advisors will: (a) directly contact
parties whom the Company or its advisors, in their sole discretion, deem
appropriate (collectively, the "Interested Parties") regarding the Bidding
Procedures or the Transaction, including follow up telephone calls after service
of the materials described hereafter in clause (b); and (b) as soon as
reasonably practicable after the Bankruptcy Court's approval of these Bidding
Procedures, serve (i) these Bidding Procedures and (ii) any order of the
Bankruptcy Court relating to these Bidding Procedures on the Interested Parties
and all parties required to be served with such documents under the Bankruptcy
Code, the Bankruptcy Rules or any order of the Bankruptcy Court.
Notwithstanding the selection of the Successful Bidder (as
hereinafter defined) and the execution of the Marked Agreement (as hereinafter
defined), the consummation of the Transaction provided for therein shall be
contingent upon, and made pursuant to, confirmation of the Plan.
Notwithstanding anything to the contrary contained herein, the
Company fully reserves the right to decide not to pursue a Transaction with a
Successful Bidder or any other party and, instead, to pursue another
restructuring alternative.
In accordance with the Bankruptcy Court's order approving the
Bidding Procedures, the Company may offer and pay a reasonable breakup fee in an
amount not to exceed one percent of the aggregate purchase price (the "Breakup
Fee") offered under the Marked Agreement of the Qualified Bidder whom the
Company determines, in its sole discretion, after consultation with its advisors
and the financial advisors to the official committee of unsecured creditors
appointed in these chapter 11 cases (the "Creditors' Committee") and the
Debtors' prepetition secured lenders (the "Prepetition Lenders"), has submitted
the highest or otherwise best bid (the "Opening Bid") prior to the Auction (as
hereinafter defined).
Determination by the Company
The Company, in its sole discretion, after consultation with
its advisors and the Creditors' Committee's and the Prepetition Lenders'
financial advisors, shall (i) determine whether any person is a Qualified
Bidder, (ii) coordinate the efforts of Qualified Bidders in conducting their
respective due diligence investigations regarding the Company, (iii) receive
bids from Qualified Bidders, and (iv) negotiate any bid made to purchase the
Company (collectively, the "Bidding Process"). Any person who wishes to
participate in the Bidding Process must be a Qualified Bidder. Neither the
Company nor its representatives shall be obligated to furnish any information of
any kind whatsoever relating to the Company and the Transaction to any person
who is not a Qualified Bidder.
Participation Requirements
A "Qualified Bidder" is a Potential Bidder (as hereinafter
defined) who delivers the documents described in subparagraphs (i) and (ii)
below and whom the Company, in its sole discretion, after consultation with its
advisors and, to the extent practicable, the Creditors' Committee's and the
Prepetition Lenders' financial advisors, determines is reasonably likely to be
able to consummate the Transaction (or the relevant component of the
Transaction), if selected as the Successful Bidder, taking into account all
financial, legal, regulatory and business considerations that the Company
determines in good faith to be relevant.
To participate in the Bidding Process, each interested person
(a "Potential Bidder") must deliver the following (unless previously delivered)
to the Company:
(i) An executed confidentiality agreement in form and substance
satisfactory to the Company; and
(ii) The most current audited and latest unaudited financial statements
(collectively, "Financials") of the Potential Bidder, or such other
form of financial disclosure as is acceptable to the Company.
Within three business days after the Company receives from a
Potential Bidder all of the materials required by subparagraphs (i) and (ii)
above, the Company shall determine, in its sole discretion, after consultation
with its advisors and, to the extent practicable, the Creditors' Committee's and
the Prepetition Lenders' financial advisors, and shall notify the Potential
Bidder in writing whether the Potential Bidder is a Qualified Bidder. Beginning
the week of April 7, 2003, the Company shall deliver to the Qualified Bidder a
confidential offering memorandum and a solicitation letter.
Obtaining Due Diligence Access
To obtain due diligence access or additional information from
the Company, a Qualified Bidder must first provide the Company with a written
non-binding expression of interest ("Expression of Interest") on or before May
2, 2003. The Expression of Interest must set forth: (i) the Qualified Bidder's
identity and, if known, the identity of any then-expected partners or
co-investors, (ii) specification of the business unit or entity proposed to be
acquired in connection with a Transaction, (iii) the form of the Transaction
that the Qualified Bidder proposes to pursue (e.g., a purchase of stock or a
purchase of assets), (iv) a non-binding indication of purchase price, (v) the
then-expected form of consideration to be offered (including the amount of cash
to be committed and the sources of financing contemplated), (vi) a list of
significant issues and assumptions that may potentially affect the Qualified
Bidder's level of interest, (vii) the nature, extent and proposed timing of
additional due diligence the Qualified Bidder may wish to conduct and (viii)
such other matters as the Company deems relevant. If, based on the Expression of
Interest or such additional factors as the Company determines are relevant, the
Company, in its business judgment and in its sole discretion, after consultation
with its advisors and the Creditors' Committee's and the Prepetition Lenders'
financial advisors, determines that the Qualified Bidder is reasonably likely to
make a bona fide offer for the Company or relevant components, the Company shall
afford such Qualified Bidder reasonable due diligence, including access to the
Company's data room.
Information requested by a Qualified Bidder that is
competitively sensitive or potentially damaging to the value of the Debtors'
estate will only be provided to Qualified Bidders who have presented to the
Company Expressions of Interest to acquire the Company as a whole in a
Transaction (which, for these purposes and in the Company's sole discretion, may
include a series of concurrent transactions for the acquisition of substantially
all of the Company's assets that addresses the manner in which all of the
Company's liabilities will be assumed or satisfied) that the Company, in its
sole discretion, after consultation with its advisors and the Creditors'
Committee's and the Prepetition Lenders' financial advisors, concludes is
reasonably likely to be successfully consummated.
Neither the Company nor any of its affiliates (or any of their
respective representatives) are obligated to furnish any information relating to
the Company and the Transaction to any person except as otherwise provided in
these Bidding Procedures.
The Company shall coordinate all reasonable requests for
additional information and due diligence access from Qualified Bidders. No
conditions relating to the completion of due diligence shall be permitted to
exist after the Bid Deadline (as hereinafter defined).
Bid Deadline
The deadline for submitting bids by a Qualified Bidder shall
be 4:00 p.m. (Eastern time) on July 10, 2003 (the "Bid Deadline"). The Company
may extend the Bid Deadline once or successively, but is not obligated to do so.
If the Company extends the Bid Deadline, it shall promptly notify all Qualified
Bidders of the extension.
A Qualified Bidder that desires to make a bid shall deliver
written copies of its bid to (i) Burlington Industries, Inc., c/o MILLER
BUCKFIRE LEWIS, 1301 Avenue of the Americas, New York, NY 10019 (Attn: Martin
Lewis and Kenneth Tuchman) (facsimile: (212) 895-1818); and (ii) counsel to
Burlington, JONES DAY, North Point, 901 Lakeside Avenue, Cleveland, OH 44114
(Attn: David G. Heiman, Esq.) (facsimile: (216) 579-0212), not later than the
Bid Deadline, who shall then distribute a copy of the bid to the Creditors'
Committee's and the Prepetition Lenders' financial advisors.
Bid Requirements
A bid must be a written irrevocable offer from a Qualified
Bidder (i) stating that the Qualified Bidder offers to consummate the
Transaction (which, for these purposes and in the Company's sole discretion, may
include a series of concurrent transactions for the acquisition of substantially
all of the Company's assets that addresses the manner in which all of the
Company's liabilities will be assumed or satisfied) as contemplated by the
Agreement, upon the terms and conditions set forth in a copy of the Agreement
marked to show those amendments and modifications to the Agreement, including
price, terms, the particular form of Transaction and the manner in which it will
assume and satisfy the liabilities of the Company, including specifically
liabilities relating to retirement benefit plans, that the Qualified Bidder
proposes (the "Marked Agreement"); (ii) confirming that the offer shall remain
open until the completion of the closing under a Plan incorporating the bid of
the Successful Bidder (other than the bidder); (iii) enclosing a copy of the
proposed Marked Agreement; and (iv) accompanied with (a) a commitment to submit
a certified or bank check, or wire transfer, in the amount of $10,000,000
payable to the order of the Company as a good-faith deposit (the "Good Faith
Deposit") immediately upon the selection of the bid as the Successful Bid (as
hereinafter defined), and (b) written evidence of a commitment for financing and
such other evidence as the Company and its advisors require to demonstrate the
bidder's ability to consummate the proposed Transaction, subject to no closing
conditions other than those set forth in the Agreement, in either event
satisfactory to the Company in its sole discretion. In addition to the foregoing
requirements, the Company will consider a bid only if the bid: (i) provides that
all cash and securities that are components of the purchase price are
denominated in U.S. dollars only; (ii) is not conditioned on obtaining financing
or the outcome of unperformed due diligence by the bidder with respect to the
Company, but may be subject to the same conditions, but only those conditions,
set forth in the Agreement; and (iii) fully discloses the identity of each
entity that will be bidding for the Company or otherwise participating in
connection with such bid, and the complete terms of any such participation.
A bid received from a Qualified Bidder that the Company
determines meets the requirements set forth in the preceding paragraph will be
considered a "Qualified Bid." Upon receipt of a Qualified Bid, the Company shall
provide the Creditors' Committee's and the Prepetition Lenders' financial
advisors with a copy of the Qualified Bid and the Marked Agreement.
Incorporation of Successful Bid into Plan
The terms of the Successful Bid shall be incorporated into the
Plan, which, together with the Disclosure Statement, shall be amended to the
extent required to give effect thereto. The closing of the Transaction to the
Successful Bidder shall be contingent upon confirmation of the Plan and the
occurrence of the effective date of the Plan. The Plan may provide that if the
Transaction to the Successful Bidder does not close on or before September 30,
2003, the Company may enter into a Transaction with the bidder making the Next
Best Bid (as hereinafter defined), without further notice or solicitation,
provided that all conditions to the closing of the Next Best Bid in the Marked
Agreement in connection therewith are satisfied.
Auction
Except as otherwise provided in these Bidding Procedures, if
more than one Qualified Bid is received by the Bid Deadline, the Company will
conduct an auction (the "Auction") with respect to the Transaction. The Auction
shall take place at 10:00 a.m. (Eastern time) on July 21, 2003 at the offices of
Jones Day, 222 East 41st Street, New York, New York 10017. The Company may
adjourn or reschedule the Auction once or successively, but is not obligated to
do so. If the Company adjourns or reschedules the Auction, it shall promptly
notify all Qualified Bidders of the new date and time of the Auction.
Only a Qualified Bidder who has submitted a Qualified Bid will
be eligible to participate at the Auction. Only the authorized representatives
of each of the Qualified Bidders, the Creditors' Committee, the Prepetition
Lenders and the Company shall be permitted to attend the Auction. Prior to the
commencement of the Auction, the Company will notify all Qualified Bidders who
have submitted Qualified Bids of the general terms of the Opening Bid. At the
Auction, Qualified Bidders will be permitted to increase their bids. The bidding
at the Auction shall start at the purchase price stated in the Opening Bid, plus
the amount of any Breakup Fee, and continue in increments of at least
$3,000,000.
The Company and its advisors reserve the right to pursue and
consider offers from Qualified Bidders to serve as a "stalking horse" bid at the
Auction. If the Company determines, in its business judgment and in its sole
discretion, after consultation with its advisors and the Creditors' Committee's
and the Prepetition Lenders' financial advisors, to enter into a Marked
Agreement with a Qualified Bidder as a stalking horse bidder (the "Stalking
Horse Bidder"), the Company: (i) may offer the Stalking Horse Bidder a Breakup
Fee; and (ii) at least two weeks prior to the Bid Deadline, will notify other
Qualified Bidders of the existence of the Stalking Horse Bidder and the terms of
the Stalking Horse Bidder's Marked Agreement. The Marked Agreement of the
Stalking Horse Bidder shall serve as the Opening Bid for purposes of these
Bidding Procedures and the Auction. Neither these Bidding Procedures nor the
Auction require, or are contingent upon, the Company selecting a Stalking Horse
Bidder, and the Company may conduct the Auction without a Stalking Horse Bidder.
Prior to the commencement of the Auction, the Company may
adopt rules for the Auction that, in its business judgment, will better promote
the goals of the Auction and that are not inconsistent with any of the
provisions of the Bankruptcy Court order approving the Bidding Procedures and
will notify all Qualified Bidders who have submitted Qualified Bids of such
rules. All such rules will provide that: (i) the procedures must be fair and
open, with Qualified Bidders being treated in substantially the same manner, to
the extent reasonably possible; (ii) all bids shall be made and received in one
room, on an open basis, and all other bidders shall be entitled to be present
for all bidding with the understanding that the true identity of each bidder
(i.e., the principals submitting each bid) shall be fully disclosed to all other
bidders and that all material terms of each Qualified Bid will be fully
disclosed to all other bidders throughout the entire Auction; and (iii) unless
otherwise agreed to by the Company, no Qualified Bidder will be permitted more
than one hour to respond to the previous bid at the Auction.
Immediately prior to the conclusion of the Auction, the
Company, in its business judgment and in its sole discretion, after consultation
with its advisors and the Creditors' Committee's and the Prepetition Lenders'
financial advisors, shall (i) review each Qualified Bid on the basis of its
financial and contractual terms and the factors relevant to the sale process and
the best interests of the Company's estate, including, without limitation, those
factors affecting the speed and certainty of consummating the Transaction and
antitrust and competition law considerations, (ii) identify the highest or
otherwise best offer in the Auction, consistent with these Bidding Procedures
(the Marked Agreement of such higher or better Qualified Bid being the
"Successful Bid" and the Qualified Bidder being the "Successful Bidder"), and
(iii) identify the next highest or otherwise best offer after the Successful Bid
(the "Next Best Bid"). Any bid submitted after the conclusion of the Auction
shall not be considered by the Company.
Approval of Successful Bid
The Company may also present the results of the Auction and
the Marked Agreement of the Successful Bidder to the Bankruptcy Court at a
hearing on July 31, 2003 at 2:00 p.m. (Eastern time) (the "Approval Hearing"),
at which the Company will request that the Bankruptcy Court make certain
findings regarding the Auction, including (i) that the Company conducted the
Auction and selected the Successful Bidder in accordance with these Bidding
Procedures, (ii) that the Auction was fair in substance and procedure, and (iii)
that the Marked Agreement constitutes the highest and best offer for the
Company.
Neither (i) the Company's inclusion of the Successful Bid in
the Plan or the Disclosure Statement, or presentation of the Successful Bid and
the Marked Agreement at an Approval Hearing, nor (ii) the entry of an order
approving the Disclosure Statement (or any other order approving the Marked
Agreement before confirmation of the Plan) by the applicable Court, shall
obligate the Company to consummate the Transaction with the Successful Bidder
unless and until the Plan has been confirmed and the effective date thereof
occurs. Without limitation, the Company shall not be obligated to select a
Qualified Bidder or pursue a Transaction and no bidder will be entitled to
reimbursement of costs or other compensation regardless of the circumstances,
except and solely to the extent approved in a specific order of the Bankruptcy
Court.
In the event that the Successful Bidder fails to close the
Marked Agreement with the Company for any reason, then the Company shall be
authorized, but not required, to close with the Qualified Bidder that submitted
the Next Best Bid, without notice to any other party (other than parties to
executory contracts and unexpired leases affected by the Next Best Bid) or
further court order.
The Company may (a) determine, in its business judgment and in
its sole discretion, after consultation with its advisors and the Creditors'
Committee's and the Prepetition Lenders' financial advisors, which Qualified
Bid, if any, is the Successful Bid and the Next Best Bid; and (b) reject at any
time before entry of an order approving the Auction Approval Motion, any bid
that, in the Company's sole discretion, is (i) inadequate or insufficient, (ii)
not in conformity with the requirements of the Bankruptcy Code, the Bidding
Procedures, or the terms and conditions of the Transaction, or (iii) contrary to
the best interests of the Company and its estate.
No Auction
The Company reserves the right, after consultation with its
advisors and the Creditors' Committee's and the Prepetition Lenders' financial
advisors, to not hold the Auction if the Qualified Bids received do not offer
sufficient value for the Company or are not otherwise in the best interests of
the Company's estate. If the Company receives only one Qualified Bid and if the
Company determines, in its business judgment and in its sole discretion, after
consultation with its advisors and the Creditors' Committee's and the
Prepetition Lenders' financial advisors, that such Qualified Bid is the best and
highest offer for the Company, the Company may select such Qualified Bid as the
Successful Bid for purposes of these Bidding Procedures without conducting an
Auction.
Good Faith Deposit
The Good Faith Deposit of the Successful Bidder shall be held
until the closing of the Transaction and applied in accordance with the Marked
Agreement. Pending the closing of the Transaction with the Successful Bidder,
the Good Faith Deposit of the Successful Bidder shall be maintained by the
Company in an interest-bearing escrow account and any interest earned on the
Good Faith Deposit shall be applied or transferred in the same manner as the
Good Faith Deposit; provided, however, that the Successful Bidder shall not have
any claim, cause of action or any similar right against the Company relating to
or arising out of the investment of the Good Faith Deposit. If the closing does
not occur, the disposition of the Good Faith Deposit shall be as provided in the
Marked Agreement.