Cone Mills liquidation plan takes effect

By Caroline Salls

Pittsburgh, May 3 - Cone Mills Corp.'s second amended Chapter 11 plan of liquidation became effective Tuesday, according to a company news release.

Under the plan, the proceeds of the sale, as well as proceeds of the liquidation of all remaining assets of the company, will be distributed to creditors in order of their relative priority under the bankruptcy code.

Also, some holders of 8 1/8% debentures due March 15, 2005 issued by Cone Mills will receive International Textile Group Inc. stock on account of their allowed claims.

The plan also calls for the cancellation of all equity interests in Cone Mills.

On Feb. 11, the U.S. Bankruptcy Court for the District of Delaware approved the sale of Cone Mills to subsidiaries of WLR Recovery Fund II LP and WLR Cone Mills Acquisition LLC, collectively known as WL Ross.

After the sale approval, WL Ross merged the Cone assets with assets purchased from Burlington Industries Inc. to form International Textile Group Inc.

Cone Mills, a Greensboro, N.C., textile manufacturer, filed for bankruptcy on Sept. 24, 2003 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 03-12944.

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