Berkshire's action follows a ruling yesterday in a hearing in Burlington's reorganization case to consider procedures to solicit alternatives to the Berkshire transaction. The bankruptcy court indicated it approved the procedures generally, but disapproved the break-up fee and certain other conditions required by Berkshire to proceed as a "stalking horse" in the alternative bid process.
While the secured bank lenders were in support, the Official Committee of Unsecured Creditors opposed the granting of a break-up fee. George W. Henderson III, Burlington's Chairman and CEO, said, "It is unfortunate that the Berkshire Hathaway break-up fee was not accepted by the court and the offer has been subsequently withdrawn by Berkshire. It was a firm cash offer that would have been a good outcome for the company, our employees and our creditors.
"We are pleased that the Court extended our period of exclusivity as part of this hearing. We are reviewing our alternatives in light of these developments, including a process to solicit new proposals. We expect to advise the bankruptcy court of our thinking next week and intend to move the process forward in a positive and expeditious manner."
Mohawk Industries appeared at the bankruptcy court Thursday and said it will bid on Burlington's carpet division.