• Thomas Russell

Icahn descends on WestPoint Stevens

Creating an unwelcome and potentially thorny issue for WestPoint Stevens as it works its way through Chapter 11, maverick corporate raider Carl Icahn, an icon of Wall Street financial engineering, has bought a chunk of the major mill's debt, putting him in a position to try to wrest control of the company.

M.L. "Chip" Fontenot, WestPoint CEO, confirmed that Icahn had acquired a portion of the company's second-lien debt.

Bob Mitchell, an associate of the investor at New York-based Icahn and Co., would say only, "We don't comment on things like that."

Lester Dupuy Sears, WestPoint chief financial officer, declined to put a specific value on the Icahn holding. "It's not a major piece of the debt. It's not that large a position," he said.

Has Icahn signed on as a passive investor, or is he likely to take a more active role at some point? "There's really no way to tell," said Fontenot. "There are a lot of people with a lot of money who are chasing this company. Clearly, they must believe what we've known all along — this is a very good company with a very bright future."

Icahn, an archetypal "vulture" investor, has specialized over the years in buying controlling stakes of bankrupt or troubled companies, fixing them up, often by slashing operations and costs, and then flipping them, creating a windfall profit for himself in the process. WestPoint is only one component of an Icahn portfolio that in recent years has included stakes in Sands Casino Hotel and XO Communications Inc. He is reported to be in the process of corralling a major stake in Federal Mogul Corp. In a recent high-profile deal, Icahn acquired embattled carrier TWA, later selling it to American Airlines.

Over the years, Icahn has developed a persona as a particular kind of Wall Streeter, one more interested in opportunistic hits than the building or operation of companies. He is frequently compared to the Gordon Gekko, "Greed is Good," character at the center of the Oliver Stone movie "Wall Street."

Thomas RussellThomas Russell | Associate Editor, FurnitureToday
trussell@furnituretoday.com

I'm Tom Russell and have worked at Furniture/Today since August 2003. Since then, I have covered the international side of the business from a logistics and sourcing standpoint. Since then, I also have visited several furniture trade shows and manufacturing plants in Asia, which has helped me gain perspective about the industry in that part of the world. As I continue covering the import side of the business, I look forward to building on that knowledge base through conversations with industry officials and future overseas plant tours. From time to time, I will file news and other industry perspectives online and, as always, welcome your response to these Web postings.

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