ClaimsWarren Buffett

“Our holdings grew to 10% of Fruit's senior debt, which will probably end up returning us about 70% of face value.”

Warren Buffett, Berkshire chairman 28 February 2002 Chairman's Letter (2001) (Berkshire Hathaway) archived copy

Prediction Their own work or organisation

Berkshire's holdings, about 10% of Fruit of the Loom's senior debt, will probably return about 70% of face value.

Unresolvable The public record could not settle it.

Prediction: Statements about events outside the person's control, checked once they fell due: did they come true?

Said for an organisation they lead or work for; it counts on both records.

What would count as true or false

The claim is that Berkshire's holding of about 10% of Fruit of the Loom's senior debt will return about 70% of face value. The test is what Berkshire actually recovered on that debt when Fruit of the Loom's bankruptcy was resolved and Berkshire acquired the company (2002). True: the reported recovery is between 65% and 75% of face value. Mostly true: the recovery is between 60% and 80% of face value, or it is about 70% but the holding was materially different from 10% of the senior debt. Mostly false: the recovery is between 50% and 60%, or between 80% and 90%. False: the recovery is below 50% or above 90% of face value.

Set before the research began.

Evidence (3)

  1. E1 0000950137-02-002658.txt Fruit of the Loom, Inc. (SEC Form 8-K) · 30 April 2002

    “On April 19, 2002, the Court entered an order (the "Confirmation Order"), confirming the Third Amended Reorganization Plan.”

  2. E2 USA: Berkshire Hathaway Completes Fruit Of Loom Deal - Just Style Just Style · 1 May 2002

    “Bankrupt apparel manufacturer Fruit of the Loom Inc was on Tuesday finally sold to Warren Buffett's Berkshire Hathaway Inc for at least $835 million in cash.”

  3. E3 [PDF] 2002pdf.pdf - BERKSHIRE HATHAWAY INC. Berkshire Hathaway Inc. Own record

    “(1) Includes Fruit of the Loom from April 30, 2002 and Garan from September 4, 2002.”

Reasoning

The evidence shows that Fruit of the Loom's reorganization plan was confirmed on April 19, 2002 [E1]. It also shows that Berkshire bought the business for at least $835 million in cash [E2] and consolidated it from April 30, 2002 [E3]. None of the items gives the percentage of face value that senior debt holders, including Berkshire, recovered. None confirms the size of Berkshire's holding either. Without a reported recovery figure, the criteria cannot be applied.

Cite this claim

Warren Buffett, “Berkshire's holdings, about 10% of Fruit of the Loom's senior debt, will probably return about 70% of face value.” (said 28 February 2002). Verdict: unresolvable. Reliability API, claim c_6dba120c8e38, method 0.1.0+28da144b, dataset release v1.1.2. https://epistacklabs.com/claims/c_6dba120c8e38

This claim is in dataset release v1.1.2, with the same verdict.

Reply to this claim

For Warren Buffett, or someone speaking for them: a correction or counter-evidence. Replies are read before anything is shown; an approved reply shows your name, role, date, statement and link. Your email address is never shown and is deleted 30 days after the decision (privacy).

More prediction claims by Warren Buffett

  1. Mostly true Prediction 4 May 2024
    “I feel very comfortable about the fact that it will be made by a board, that they’ve got loads of brainpower, they’ve got a dedication to an unusual institution, and they will figure things out.”

    Buffett said he feels very comfortable that the post-Buffett decision will be made by Berkshire's board, which he said has loads of brainpower and a dedication to an unusual institution and will figure things out.

  2. Resolved true Prediction 4 May 2024
    “But we have sold shares, and I would say that at the end of the year, I would think it extremely likely that Apple is the largest common stock holding we have now.”

    Apple will very likely still be Berkshire's largest common stock holding at the end of 2024, despite Berkshire having sold some shares.

  3. Resolved true Prediction 2007
    “In 2007, our results from the bread-and-butter lines of insurance will deteriorate, though I think they will remain satisfactory.”

    Berkshire's results from its bread-and-butter insurance lines will deteriorate in 2007, though Buffett said he thought they would remain satisfactory.

  4. Mostly true Prediction 28 February 2002
    “Ron Peltier has built this business for us, and it's likely he will make more acquisitions in 2002 and the years to come.”

    Ron Peltier will likely make more real estate brokerage acquisitions for Berkshire in 2002 and the following years.

  5. Mostly true Prediction 28 February 2002
    “Nevertheless we feel that overall the transaction will prove satisfactory for Berkshire.”

    Berkshire expects the FINOVA transaction overall to prove satisfactory for Berkshire.

All of them

Verdicts are made automatically; how verdicts are made.