March 17, 2000
Fruit of the Loom to Close Factory in Kentucky
Fruit of the Loom Ltd. announced yesterday that it will close its
Frankfort, Ky., screenprinting and embroidery factory as part of the
wind-down of its Sports & Licensing Division, which has been
approved by the bankruptcy court overseeing the company's chapter 11,
according to Reuters. The Chicago-based apparel maker said the
approximately 280 workers at the factory were notified yesterday that
their jobs would be eliminated. The division consists primarily of the
company's subsidiaries, Salem Sportswear Inc. and Pro Player Inc. Fruit
of the Loom unsuccessfully tried to sell Pro Player for several months,
and last month the court gave its approval to wind down Pro Player
operations and sell its assets. Some 180 employees at Salem's Sportswear
headquarters in Hudson, N.H., were notified Feb. 25 that their jobs were
being eliminated. An additional 20 workers in New York City and Canada
were also affected. Fruit of the Loom filed chapter 11 on Dec. 29.
Iridium Receives Multiple Offers
Late last night it was not clear whether a credible buyer could be
found in time to save Iridium LLC from liquidation, the Associated Press
reported. Iridium and its investors are reviewing several bids to
determine whether to submit any of them to the New York bankruptcy court
overseeing its chapter 11 case. The bidders were not disclosed, but an
attorney for Los Angeles-based Crescent Communications Inc., a privately
held telecommunications company, said it is finalizing details crucial
to its offer. The terms have not been disclosed, but the company does
want Motorola Corp., Iridium's creator and largest investor, to agree to
continue operating Iridium's satellites for another 60 to 90 days. After
the three-month period, Crescent would have General Dynamics Corp. take
over operation of the satellites. Iridium, which filed chapter 11 last
August, has debts of about $4.4 billion.
AutoInfo Announces Hearing for Pre-packaged Chapter 11
AutoInfo Inc., Stamford, Conn., announced yesterday that the hearing
to consider compliance with the disclosure statement was adjourned and
rescheduled, according to a newswire report. The hearing has been
rescheduled for April 6 before Hon. Adlai S. Hardin Jr., S.D.N.Y.
AutoInfo President and CFO William Wunderlich said, 'We regret this
delay but continue to look forward to the confirmation of our plan so
that we may proceed toward the consummation of a transaction in our
continuing efforts to restore shareholder value.'
Gibbs Construction Reports Continuing Losses
Gibbs Construction Inc., Garland, Texas, announced that the company
is continuing to experience losses resulting from its current operations
and that it expects to report additional charges as a result of its Dec.
31, 1999, audit, currently near completion, according to a newswire
report. The company said the additional charges could substantially
eliminate its net worth. Gibbs President Danny Gibbs said, 'Losses
stemming from the construction of hotel projects, the bankruptcy of Just
For Feet (a major client) and the company's inability to attract a
significant volume of profitable work has resulted in a tenuous
situation for the company.' He also said the company is continuing to
eliminate non-essential expenses, reduce staff, reorganize the
construction services the company provides and pursue all avenues that
would permit the company to retain value for its shareholders. Gibbs is
a general contractor providing construction services for retail, office
and specialty real estate.
Truckers Object to Gas Prices and Cite High Costs as
Job-threatening
A convoy of tractor-trailer rigs rolled into Washington yesterday
for the second time this year to protest rising fuel costs that they say
have devastated their livelihood, The Washington Post reported.
One trucker from Culpepper, Va., said that 'We went from earning $800 to
$900 a week in January to losing $300 or $400 a week now to keep
driving, all because of fuel costs.' In addition to protesting the
prices, they urged the government to release oil from the Strategic
Petroleum Reserve, to supervise freight rates and to put more pressure
on the Organization of Petroleum Exporting Countries (OPEC) to increase
oil supplies. Many of the truckers want the government to enact a
mandatory fuel surcharge, passed directly to customers and noted on
bills as relief for diesel prices that have jumped to nearly $3 per
gallon in some states. Jim Johnson, president of the Owner-Operator
Independent Drivers Association, said, 'This country will be in the
damndest crisis it ever faced' if steps are not taken soon. He said that
because so many truckers have abandoned the business since the end of
last year, the value of used trucks is now down by 20 percent. Many
truckers are dipping into savings to get by, and one trucker, Barry
Grinnell, who drove to D.C. from West Haven, Conn., said that he nearly
filed for bankruptcy last month because his wife's work is also
dependent on the trucking industry. Grinnell said he shuts down his
truck after about three days of work each week‹as soon as he makes
enough money to cover his payment. His wife is a truck-stop waitress;
her income has dropped from $90 to $30 a shift since the fuel crisis
began.
California District Attorney Announces Guilty Plea to Bankruptcy
Fraud
Gregory A. Vega, U.S. Attorney, S.D. Calif., announced that Shinya
Kusunoki recently pled guilty to three counts of an indictment charging
him with bankruptcy fraud, according to the Department of Justice.
According to the indictment, Kusunoki was the president and majority
shareholder of Nippon Container Inc., which sold corrugated cardboard
packaging inserts. On Dec. 5, 1997, Kusunoki filed a chapter 7 petition
for his business in the Southern District of California. Between Dec.
12, 1997 and Feb. 6, 1998, the defendant received more than $60,000 from
his main customer and concealed these bankruptcy estate assets from his
creditors and the bankruptcy trustee. Kusunoki, a 38-year-old Japanese
national who was residing in Hawaii, faces a maximum five years in
prison, a $250,000 fine and three years of supervised release. The
chapter 7 panel trustee, the U.S. Trustee, the FBI and the U.S. Attorney
worked together on the prosecution.
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