One of the bigger takeover messes of the 1980s has finally been tidied up. On Aug. 13, Farley Inc. sidestepped a contentious Chapter 7 bankruptcy proceeding, reaching a deal with creditors that exchanges $172 million of subordinated notes in Farley Inc. for 3 million shares of Fruit of the Loom and a 9.2% stake in Doehler-Jarvis, a midsize metalworking company. Takeover investor William Farley, who long clung to majority control of Fruit, will see his personal voting power drop to 33%. Big winners in the deal include those Farley retirees who belonged to the United Auto Workers. Their medical plan will be secured by 2.4 million Fruit shares.
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