Berkshire deals for Fruit of the Loom

OMAHA, Nov. 1 (UPI) -- Berkshire Hathaway Inc. has reached a deal with creditors of Fruit of the Loom Inc. to buy the underwear and apparel maker out of Chapter 11 bankruptcy for $835 million, the companies announced late Thursday in a joint statement.

"We've agreed to buy Fruit of the Loom for two major reasons: the strength of the brand and the managerial talent of John Holland," said Warren Buffett, chairman of Berkshire Hathaway, in a statement.

The deal was expected to close in the first-quarter of next year.

Fruit of the Loom filed for bankruptcy in December 1999. The company owes almost $1.2 billion to secured lenders and bondholders, and more than $300 million to unsecured bondholders.

"Berkshire's acquisition will complete the company's tremendous operational turnaround and pave the way for emergence from Chapter 11," said John Holland, Fruit of the Loom's chief operating officer, in a statement.

The sale of the 130-year-old company, which must be approved by the U.S. Bankruptcy Court in Delaware, would pay creditors cash for their equity holdings.