Salant Files for Bankruptcy

By Reports, From Wire | THE JOURNAL RECORD, June 28, 1990 | Go to article overview
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Salant Files for Bankruptcy

Reports, From Wire, THE JOURNAL RECORD

Salant Files for Bankruptcy Apparel manufacturer Salant Corp. sought refuge in bankruptcy court Wednesday after struggling unsuccessfully with debts incurred in buying a larger rival two years ago.

It was the second filing under Chapter 11 of the federal Bankruptcy Code for the New York-based clothing company, whose nationally known brands include Dr. Denton sleepwear, John Henry shirts and Lady Manhattan sportswear.

Salant attributed its troubles to weakness in the retail business at a time of year that is always the slowest for the company.

The fate of Salant furnished another example of what can happen when companies fail to generate enough cash to pay for takeovers financed with borrowed money.

The bankruptcy filing was foreshadowed in mid-June when Salant diclosed discussions with lenders about refinancing its debts.

Reform Bills Would Increase SEC Powers WASHINGTON - Bills that would give the Securities and Exchange Commission authority to curb penny stock fraud and other illegal activities were approved by a House committee Wednesday.

The House Energy and Commerce Committee, which oversees the Wall Street regulator, voted to send the Penny Stock Reform Act and the Securities Law Enforcement Remedies Act to the full House for consideration.

The penny stock bill, introduced just two months ago, would give the SEC power to bar crooked promoters and consultants from selling the highly speculative stocks which usually sell for a dollar or less.

Former S&L Owner Enters Innocent Plea DALLAS - Former Vernon Savings & Loan owner Don Dixon, accused of illegally trying to raise money for former House Speaker Jim Wright and others, pleaded innocent Wednesday to 38 federal charges in the collapse of his thrift three years ago.

A trial date of Aug. 20 was set by U.S. District Judge Joe Fish for Dixon, who remained free on personal recognizance.

A federal grand jury in Dallas indicted Dixon June 13 in the $1.3 billion collapse of Vernon Savings and Loan in 1987. Federal regulators at the time called Vernon a prime example of the abuses in the savings and loan industry.

Dixon has staunchly maintained his innocence and has claimed he is a scapegoat for the government's mishandling of the savings and loan crisis.

The indictment alleges that Dixon used thrift money for contributions to political candidates, including Wright, and misused thrift money.

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Salant Files for Bankruptcy


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