Buffett files reorganisation plan for Fruit of the Loom

Following the success of its $835 million (¤932 million) bid to buy the clothing firm Fruit of the Loom, Warren Buffett's Berkshire Hathaway has filed a reorganisation plan with Delaware Bankruptcy Court as the first step in repaying Fruit of the Loom's creditors.

Fruit of the Loom announced at the weekend that Berkshire Hathaway had won the bankruptcy judge's approval for a takeover of the clothing company which controls about one-third of the men's underwear market in the United States. On January 2nd US Bankruptcy Judge Peter Walsh declared Berkshire's bid "the highest and best offer", following a December 18th auction at which it was the only bidder.

The decision allows Fruit of the Loom to proceed with its bankruptcy reorganisation plan, under which the proceeds of the sale will be used to to repay some creditors' claims. Burdened with $1.2 billion in secured debt and about $500 million in unsecured debt, Fruit of the Loom filed for bankruptcy protection in December 1999, and agreed in November to be bought out by Berkshire Hathaway.The takeover is not expected to have any effect on employment in the company's operations in counties Donegal and Derry.

The company employs about 830 people in its Irish operations.