Fruit of the Loom
After acquiring Fruit of the Loom in a leveraged buyout in 1985, Bill Farley, an eccentric businessman who once contemplated a run for President, built the underwear and t-shirt maker to $2 billion in sales a year. In the late 1990s, faced with intensifying competition from overseas, Fruit moved factories to locations like Morocco and Mexico and reincorporated in the Cayman Island to minimize taxes — but the restructuring was grossly mismanaged, and Farley (later the target of shareholder lawsuits) was pushed out in 1999, four months before the company declared bankruptcy.
While Fruit was in bankruptcy, Berkshire Hathaway, Warren Buffet's financial and industrial conglomerate, bought the company. Fruit's old stockholders received nothing — a typical bankruptcy outcome. Its secured creditors — those that lent money against particular assets — received 92.5% of the proceeds from the sale, and its unsecured creditors — those that held general corporate bonds — got the remaining 7.5%. Fruit still operates as a stand-alone division of Berkshire.