
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, August 20, 1993                   TAG: 9308200098
SECTION: BUSINESS                    PAGE: A-9   EDITION: METRO 
SOURCE: Associated Press
DATELINE: CHARLOTTE, N.C.                                LENGTH: Medium

LAWSUITS CHALLENGE FIELDCREST

Two Fieldcrest Cannon Inc. shareholders are suing the company, claiming the towel maker's decision to buy out a key shareholder instead of accepting a buyout offer from another textile company is a "gross and reckless waste" of money.

Fieldcrest Cannon, which operates a towel plant in Fieldale, Va., said last week it will offer $137.6 million, or $40 a share, for Amoskeag Co. The Boston management company controls more than 80 percent of Fieldcrest Cannon stock's voting power.

The deal means Fieldcrest's stockholders, who were to get $27.50 a share under a takeover offer from Fort Mill, S.C.-based Spring Industries Inc., get nothing.

Fieldcrest's directors breached their responsibilities to treat shareholders with "loyalty, due care, good faith and fair dealing," say the lawsuits filed in the Chancery Court of Delaware, where Fieldcrest is incorporated.

The plan to buy Amoskeag "has no legitimate corporate purpose and is a gross waste of the corporate assets," the lawsuits said.

"It's nothing out of the ordinary," said Fieldcrest Cannon financial officer William Fraser. "We don't feel we've done anything wrong."

Fieldcrest also said it has hired New York public relations firm Sard Verbinnen & Co., whose first task will be to defend the company's actions as speculative traders push for a sale to the highest bidder.

One of those firms is Wyser-Pratte & Co., of New York, which specializes in trading takeover stocks and has bought a "significant amount" of Fieldcrest Cannon stock. President Guy Wyser-Pratte said the firm will not allow Fieldcrest's board to ignore the Spring Industries offer or other bids without a fight.

Fieldcrest has defended its board's decision, saying shareholders are best served in the long run if the company remains independent.

On Tuesday, Eden-based Fieldcrest said in documents filed with the Securities and Exchange Commission that it could terminate its offer to buy Amoskeag if it doesn't sell at least $70 million of a planned preferred stock offering. Another $75 million will be raised under an existing credit agreement, the company said.

by CNB