##### Table of Contents

---



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q



(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SELECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2004
|- | -----------------------------------------------------------------------------------------------------------------------------------------



Commission File Number 001-08941*



FRUIT OF THE LOOM

UNSECURED CREDITORS TRUST

(Exact
name of registrant as specified in its charter)



|                                                                                              |  |                                     
|--------------------------------------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                                                      |  | 04-6979618                          
|(State or other jurisdiction of incorporation or organization)                                |  | (I.R.S. Employer Identification No.)
|                                                                                              | 
|c/o Clingman & Hanger Management Associates, LLC 11038 Lakeridge Parkway, Suite 4 Ashland, VA |  | 23005                               
|(Address of principal executive offices)                                                      |  | (Zip Code)                          



Registrants
telephone number, including area code: 804-550-7911



---



Securities registered pursuant to Section 12(b) of the Act: NONE



Securities registered pursuant to Section 12(g) of the
Act: NONE



Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Not applicable. Reference is made to the Form 15 filed on May 2, 2002.



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes ̈No  x



State the aggregate market value of the voting and non-voting common equity held by non-affiliates. Not applicable.



Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Not Applicable



DOCUMENTS INCORPORATED BY REFERENCE: NONE



|* |  | Fruit Of The Loom Unsecured Creditors Trust is a transferee of certain of the assets and liabilities of Fruit of the Loom, Inc., and files reports under Fruit of the Loom,
Inc.s former Commission file number. Fruit of the Loom, Inc. filed a Form 15 on May 2, 2002, indicating its notice of termination of registration and filing requirements.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---





---

##### Table of Contents

TABLE OF CONTENTS



PART I 
FINANCIAL INFORMATION



|                  |  |                                                                                       |  |   
|----------------- |  | ------------------------------------------------------------------------------------- |  | --
|ITEM 1.           |  | FINANCIAL STATEMENTS                                                                  |  | 3 
|                  |  | Cash Balance Sheet at January 31, 2004 and April 30, 2003                             |  | 4 
|                  |  | Statement of Operations for Nine Months Ended January 31, 2004 and 2003               |  | 5 
|                  |  | Statement of Cash Flows for Nine Months Ended January 31, 2004 and 2003               |  | 6 
|                  |  | Notes to Financial Statements                                                         |  | 7 
|                  |  |                                                                                      
|ITEM 2.           |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |  | 10
|                  |  |                                                                                      
|ITEM 3.           |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            |  | 12
|                  |  |                                                                                      
|ITEM 4.           |  | CONTROLS AND PROCEDURES                                                               |  | 12
|                  |  |                                                                                      
|                  |  | PART II  OTHER INFORMATION                                                           |  |   
|                  |  |                                                                                      
|ITEM 1.           |  | LEGAL PROCEEDINGS                                                                     |  | 13
|                  |  |                                                                                      
|ITEM 2.           |  | CHANGES IN SECURITIES                                                                 |  | 13
|                  |  |                                                                                      
|ITEM 3.           |  | DEFAULTS UPON SENIOR SECURITIES                                                       |  | 13
|                  |  |                                                                                      
|ITEM 4.           |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                   |  | 13
|                  |  |                                                                                      
|ITEM 5.           |  | OTHER INFORMATION                                                                     |  | 13
|                  |  |                                                                                      
|ITEM 6.           |  | EXHIBITS AND REPORTS ON FORM 8-K                                                      |  | 13
|                  | 
|SIGNATURES        |  | 14                                                                                   
|                  | 
|INDEX TO EXHIBITS |  | 15                                                                                   





2



---

##### Table of Contents

This report includes forward-looking statements. These forward-looking statements include,
but are not limited to, statements about our plans, objectives, representations and contentions and are not historical facts, which typically may be identified by use of terms such as anticipate, believe,
estimate, plan, may, expect, intend, could, potential, and similar expressions, although some forward-looking statements are expressed differently. You should be
aware that the forward-looking statements included in this report represent the Trustees current judgment and expectations, but our actual results, events and performance could differ materially from those in the forward-looking statements.
The forward looking statements are subject to a number of risks and uncertainties. We do not intend to update any of these factors or to publicly announce the results of any revisions to these forward-looking statements.



PART I  FINANCIAL INFORMATION



|ITEM 1   |  | FINANCIAL STATEMENTS
|--------- |  | --------------------







3



---

##### Table of Contents

Fruit Of The Loom



Unsecured Creditors Trust

Cash Balance Sheet

(unaudited)



|                                                     |  |                       |           |                     |   |           
|---------------------------------------------------- |  | --------------------- | --------- | ------------------- | - | ----------
|                                                     |  | As ofJanuary 31, 2004 |           | As ofApril 30, 2003
|Assets:                                              |  |                       |           |                     |   |           
|Cash                                                 |  | $                     | 9,830,263 |                     | $ | 17,431,268
|                                                     |  |                       |           |                     |   |           
|Total Assets                                         |  | $                     | 9,830,263 |                     | $ | 17,431,268
|                                                     |  |                       |           |                     |   |           
|Liabilities (Reserves):                              |  |                       |           |                     |   |           
|Distribution Reserve for Allowed and Disputed Claims |  | $                     | 8,972,260 |                     | $ | 15,784,302
|Case Administration Expense Reserve                  |  | $                     | 858,003   |                     | $ | 1,646,966 
|                                                     |  |                       |           |                     |   |           
|Total Liabilities (Reserves)                         |  | $                     | 9,830,263 |                     | $ | 17,431,268
|                                                     |  |                       |           |                     |   |           





4



---

##### Table of Contents

Fruit Of The Loom



Unsecured Creditors Trust

Statement of Operations

(unaudited)



|                                                    |  |                           |            |   |                               |   |            |                                                                |  |   |            |   |  |   |            |   |  |   |             |  
|--------------------------------------------------- |  | ------------------------- | ---------- | - | ----------------------------- | - | ---------- | -------------------------------------------------------------- |  | - | ---------- | - |  | - | ---------- | - |  | - | ----------- | -
|                                                    |  | Quarter Ended January 31, |            |   | Nine Months Ended January 31, |   |            | Twenty One Months FromTrust Inception Through January 31,
2004 | 
|                                                    |  | 2004                      |            |   | 2003                          |   |            | 2004                                                           |  |   | 2003       |   |  |   |           
|Receipts:                                           |  |                           |            |   |                               |   |            |                                                                |  |   |            |   |  |   |            |   |  |   |             |  
|Distributions from FOL Liquidation Trust            |  | $                         | 336,236    |   |                               | $ | 1,441,011  |                                                                |  | $ | 1,184,831  |   |  | $ | 18,445,360 |   |  | $ | 20,222,607  |  
|Initial Funding of UCT Case Administration Expenses |  | $                         |           |   |                               | $ |           |                                                                |  | $ |           |   |  | $ | 2,705,000  |   |  | $ | 2,705,000   |  
|Interest and Other Income                           |  | $                         | 21,514     |   |                               | $ | 95,985     |                                                                |  | $ | 97,913     |   |  | $ | 157,491    |   |  | $ | 436,637     |  
|                                                    |  |                           |            |   |                               |   |            |                                                                |  |   |            |   |  |   |            |   |  |   |             |  
|Total Receipts                                      |  | $                         | 357,750    |   |                               | $ | 1,536,996  |                                                                |  | $ | 1,282,744  |   |  | $ | 21,307,851 |   |  | $ | 23,364,244  |  
|                                                    |  |                           |            |   |                               |   |            |                                                                |  |   |            |   |  |   |            |   |  |   |             |  
|Disbursements & Expenses:                           |  |                           |            |   |                               |   |            |                                                                |  |   |            |   |  |   |            |   |  |   |             |  
|Distributions from UCT                              |  | $                         | (1,416,485 | ) |                               | $ | (973,961   | )                                                              |  | $ | (8,094,786 | ) |  | $ | (2,261,906 | ) |  | $ | (11,686,984 | )
|Trust Expense                                       |  | $                         | (218,593   | ) |                               | $ | (380,667   | )                                                              |  | $ | (788,963   | ) |  | $ | (774,058   | ) |  | $ | (1,846,997  | )
|                                                    |  |                           |            |   |                               |   |            |                                                                |  |   |            |   |  |   |            |   |  |   |             |  
|Total Disbursements & Expenses                      |  | $                         | (1,635,078 | ) |                               | $ | (1,354,628 | )                                                              |  | $ | (8,883,749 | ) |  | $ | (3,035,964 | ) |  | $ | (13,533,981 | )
|                                                    |  |                           |            |   |                               |   |            |                                                                |  |   |            |   |  |   |            |   |  |   |             |  
|Net Receipts (Disbursements & Expenses)             |  | $                         | (1,277,328 | ) |                               | $ | 182,368    |                                                                |  | $ | (7,601,005 | ) |  | $ | 18,271,887 |   |  | $ | 9,830,263   |  
|                                                    |  |                           |            |   |                               |   |            |                                                                |  |   |            |   |  |   |            |   |  |   |             |  





5



---

##### Table of Contents

Fruit Of The Loom



Unsecured Creditors Trust

Statement of Cash Flows

(unaudited)



|                                                    |  |                                   |            |   |                                   |   |            |                                                                |  |   |             |  
|--------------------------------------------------- |  | --------------------------------- | ---------- | - | --------------------------------- | - | ---------- | -------------------------------------------------------------- |  | - | ----------- | -
|                                                    |  | Nine Months EndedJanuary 31, 2004 |            |   | Nine Months EndedJanuary 31, 2003 |   |            | Twenty One Months FromTrust Inception Through January 31,
2004 | 
|Cash at Beginning of Period                         |  | $                                 | 17,431,268 |   |                                   | $ |           |                                                                |  | $ |            |  
|Cash Flow from Unsecured Creditor Trust Funding:    |  |                                   |            |   |                                   |   |            |                                                                |  |   |             |  
|Distributions from FOL Liquidation Trust            |  | $                                 | 1,184,831  |   |                                   | $ | 18,445,360 |                                                                |  | $ | 20,222,607  |  
|Initial Funding of UCT Case Administration Expenses |  | $                                 |           |   |                                   | $ | 2,705,000  |                                                                |  | $ | 2,705,000   |  
|                                                    |  |                                   |            |   |                                   |   |            |                                                                |  |   |             |  
|Total                                               |  | $                                 | 1,184,831  |   |                                   | $ | 21,150,360 |                                                                |  | $ | 22,927,607  |  
|                                                    |  |                                   |            |   |                                   |   |            |                                                                |  |   |             |  
|Cash Flow from Investing Activities:                |  |                                   |            |   |                                   |   |            |                                                                |  |   |             |  
|Interest and Other Income                           |  | $                                 | 97,913     |   |                                   | $ | 157,491    |                                                                |  | $ | 436,637     |  
|                                                    |  |                                   |            |   |                                   |   |            |                                                                |  |   |             |  
|Total                                               |  | $                                 | 97,913     |   |                                   | $ | 157,491    |                                                                |  | $ | 436,637     |  
|                                                    |  |                                   |            |   |                                   |   |            |                                                                |  |   |             |  
|Cash Flow from Trust Operations:                    |  |                                   |            |   |                                   |   |            |                                                                |  |   |             |  
|Distributions from UCT                              |  | $                                 | (8,094,786 | ) |                                   | $ | (2,261,906 | )                                                              |  | $ | (11,686,984 | )
|Trust Expense                                       |  | $                                 | (788,963   | ) |                                   | $ | (774,058   | )                                                              |  | $ | (1,846,997  | )
|                                                    |  |                                   |            |   |                                   |   |            |                                                                |  |   |             |  
|Total                                               |  | $                                 | (8,883,749 | ) |                                   | $ | (3,035,964 | )                                                              |  | $ | (13,533,981 | )
|                                                    |  |                                   |            |   |                                   |   |            |                                                                |  |   |             |  
|Net Cash Flow                                       |  | $                                 | (7,601,005 | ) |                                   | $ | 18,271,887 |                                                                |  | $ | 9,830,263   |  
|                                                    |  |                                   |            |   |                                   |   |            |                                                                |  |   |             |  
|Cash at the end of period                           |  | $                                 | 9,830,263  |   |                                   | $ | 18,271,887 |                                                                |  | $ | 9,830,263   |  
|                                                    |  |                                   |            |   |                                   |   |            |                                                                |  |   |             |  





6



---

##### Table of Contents

FRUIT OF THE LOOM

UNSECURED CREDITORS TRUST

LIQUIDATING TRUST NOTES TO THE FINANCIAL STATEMENTS

(UNAUDITED)



1.    General



On December 29, 1999, Fruit of the Loom, Inc. (FTL) filed with the United States Bankruptcy Court for the District of Delaware (the
Bankruptcy Court) a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. The Third Amended Joint Plan of Reorganization of Fruit of the Loom, et. al. (the Plan) was confirmed by the Bankruptcy Court on April
19, 2002. The Plan became effective on April 30, 2002 (the Effective Date). In accordance with the Plan, the apparel business of Fruit of the Loom was sold to Berkshire Hathaway, Inc. pursuant to the Asset Purchase Agreement (the
APA) by and between Fruit of the Loom, Ltd., Fruit of the Loom, Inc., Union Underwear, Inc., FTL Caribe, Ltd. (the Sellers) and New FOL, Inc. (the Purchaser) and Berkshire Hathaway, Inc.



The Fruit of the Loom Unsecured Creditors Trust (the UCT) was
established pursuant to the Plan. The operation of the UCT is governed by the Plan and the Trust Agreement executed pursuant thereto. Terms which are not defined herein are defined in the Plan and the Trust Agreement. Clingman & Hanger
Management Associates, LLC serves as the Trust Administrator (the Trustee) of the UCT. The UCT was established to perform certain obligations of FTL under the Plan, including: (a) receiving distributions from the FOL Liquidation Trust
intended for holders of Allowed Class 4A Claims (the Trust Claims) and distributing those funds to those holders; (b) holding and distributing any proceeds received from the Creditors Committee Action, which the UCT Advisory
Committee (the UCTAC) subsequently determined not to pursue; (c) having the exclusive authority to prosecute, settle or otherwise resolve objections to Disputed Trust Claims and to prosecute, settle or otherwise resolve the
Creditors Committee Action and (d) such other purposes as set forth in the Plan and the Trust Agreement.



To the extent of any inconsistency between these Notes to the Unaudited Financial Statements and the Plan or the Trust Agreement, the terms of the Plan or
the Trust Agreement (as the case may be) control.



2.    Beneficiaries and Beneficial Interests



The Beneficiaries of the UCT are the holders of Allowed Class 4A claims. Each holder of an Allowed Class 4A Claim receives an uncertificated beneficial interest in the UCT in proportion to their pro rata share of
Trust Claims.



3.    Summary of Significant Accounting
Policies and Method of Accounting



7



---

##### Table of Contents

The UCT financial statements are prepared on a cash basis of accounting. Transactions (including the
recording of interest earned) are recorded when cash is received or disbursed. The Cash Basis Balance Sheet includes cash arising from cash transactions, while the Statement of Operations includes cash receipts as additions and cash disbursements as
expenses/deductions. The Trust Agreement, approved by the Bankruptcy Court as part of the confirmation of the Plan, provides for the fiscal year of the UCT to end on April 30.



The UCTs financial statements present, to the best of the Trustees knowledge, the cash receipts and
disbursements from the Trust for the period reported. The financial reports and accompanying information were prepared for the use of the Trustee and the UCTAC and for filing with the Bankruptcy Court in accordance with Section 7.1 of the Trust
Agreement.



4.    Commitments, Contingencies and
Recoveries



As discussed in Note 1, the financial
statements are prepared on a cash basis. Accordingly, no accrual has been made for potential liabilities or recoveries (including interest earned, but not yet received or estimates of future distributions from the FOL Liquidation Trust), however,
the Trust has established Disputed Claim Reserves and Other Reserves as required or allowed by the Plan and the Trust Agreement, which reserves have been established in the reasonable business judgment of the Trustee and pursuant to order of the
Bankruptcy Court as described in Note 5.



5.    Claims,
Distributions and Reserves



The UCT has filed various
Omnibus Objections to Claims and, after notice and hearing, orders allowing and expunging claims of non-responding claimants were entered by the Court. The UCT has resolved certain other claims on a consensual basis.



On the Effective Date, there were approximately 3,450 Class 4A Claims. As of
January 31, 2004, there are approximately 1,935 Class 4A Claims remaining, of which 1,300 have been Allowed, leaving approximately 635 Disputed Claims.



With the approval of the Bankruptcy Court, the UCT made its first distribution to holders of the Initial Allowed Claims on October 30, 2002 as required by
Section 4.5(b) of the Trust Agreement. Section 8.6 of the Plan provides that on the Initial Distribution Date, the UCT shall establish a Reserve for Disputed Claims, consisting of the ratable proportion of all cash allocated for distribution on
account of each Disputed Claim based upon the asserted amount of each Disputed Claim or such amount as may be agreed to by the holder of the Claim and the UCT or as may otherwise be determined by the Court. On September 18, 2002, the UCT filed a
motion (the First Reserve Motion) with the Bankruptcy Court to establish the amount of the Disputed Reserve. On October 10, 2002, the Bankruptcy Court granted the UCTs First Reserve Motion and entered an order approving the Initial
Distribution and the Disputed Reserves Proposed in the First Reserve Motion (the Initial Distribution Reserve Order). Based upon the amount of the claims for which reserves were established, an Initial Distribution of 3.9297% was
authorized by the court and made by the UCT to holders of Allowed Claims.



On July 30, 2003, the UCT made its Second Distribution in the amount of 4.5446% to holders of Allowed Claims pursuant to the reserving methodology approved by the Bankruptcy Court for the First Reserve Motion. This
brings the total distribution to holders of Allowed Claims to 8.4743% as of January 31, 2004.



As of January 31, 2004, 1,300 claims have been allowed in the total amount of $154,921,570. The Initial Distribution of 3.9297% and the Second Distribution of 4.5446%, totalling 8.4743%, has been disbursed to holders
of 1,097 Allowed Claims who have provided the UCT with taxpayer identification numbers as required by the Trust Agreement. As of January 31, 2004, $11,686,984 has been disbursed and the UCT continues to hold $1,441,535 for 203 holders of Allowed
Claims who have not provided the taxpayer identification information required by the Trust Agreement. Such funds will be disbursed upon receipt of the necessary taxpayer identification numbers.



8



---

##### Table of Contents

Except as set forth in the First Reserve Motion, the UCT did not seek estimation of individual claims,
but rather an estimation of certain categories of claims as described therein. This approach has less adverse impact upon the claimants than would the estimation of each claim, because the aggregate estimation does not limit any individual
claimants claim. Notwithstanding anything contained herein or in the First Reserve Motion, the amounts reflected herein for the Disputed Claims are for reserve purposes only, and the UCT reserves the right to object to any claim, and to
continue to pursue any pending objection to any claim.



During
the quarter ended January 31, 2004, the UCT received distributions from the FOL Liquidation Trust in the amount of $336,236. During the Quarter ended January 31, 2003, the UCT received distributions from the FOL Liquidation Trust in the amount of
$1,441,011. Since the Effective Date, the UCT has received distributions from the FOL Liquidation Trust in the aggregate amount of $20,222,607. All of the amounts received from the FOL Liquidation Trust, net of distributions to holders of Allowed
Claims, are in the cash balances as part of the Reserve for Allowed and Disputed Claims. As of January 31, 2004, the UCT holds total reserves of $8,972,260 for Allowed and Disputed Claims. As of April 30,2003, the UCT held total reserves of
$15,784,302 for Allowed and Disputed Claims.



Pursuant to
Section 7.23.5 of the Plan, the UCT received $2,705,000, which is allocated solely for trust expenses and which is returned to the FOL Liquidation Trust to the extent not used for such expenses. At this time, while reserving all of its rights with
respect thereto, the UCT believes that no additional funds need be allocated from the funds currently held in the Distribution Reserve for Allowed and Disputed Claims as possible funding for trust expenses of case administration. The UCT anticipates
that all or substantially all of the funds held in the Case Administration Reserve will be used for case administration expenses, and that any amount needed beyond such reserve should be relatively small. If trust expenses for case administration do
exceed the Case Administration Reserve, the UCT anticipates that such required additional funding can be funded from future distributions from the FOL Liquidation Trust and/or interest income. Accordingly, the amounts expended for trust expenses are
not anticipated to significantly impact the distributions to the holders of Allowed Claims in Class 4A due to the separate funding of all, or substantially all, of the UCTs trust expenses.



6.    Trust Termination



The UCT shall terminate upon the distribution of all assets held in UCT but
not later than three years after the Effective Date; provided, however, if the Trustee determines it to be in the best interest of the Beneficiaries, and subject to the approval of the Bankruptcy Court, the term of the UCT may be extended for one or
more finite terms. The Trust Agreement originally provided that the UCT would terminate not later than five years after the Effective Date (subject to extension with approval of the Bankruptcy Court). In conjunction with commencement of periodic
reporting to the Securities and Exchange Commission (SEC), the UCT and the UCTAC amended the Trust Agreement to provide for the UCTs termination not later than three years after the Effective Date (subject to extension with
approval of the Bankruptcy Court) to be consistent with published advice from the SEC to other liquidating trusts.



7.    Income Tax Status



The receipt of the uncertificated interest in the UCT constitutes full satisfaction of a Beneficiarys claim against FTL. Pursuant to the Plan, as of
the Effective Date, a Beneficiary was deemed to have received its allocable share of the assets that were then deemed contributed to the UCT.



Upon the advice of tax counsel, the UCT determined that Grantor Trust Statements are required to be issued after the end of the UCTs first fiscal
year, which is April 30, 2003. Accordingly, 2003 Grantor Trust Statements were issued to Beneficiaries reporting required tax information, including each grantors share of the income, gain, deductions, loss or credits of the Trust attributable
to the period from the date of the Trusts formation through the end of the UCTs first fiscal year on April 30, 2003, with the amounts so reported to be reflected on the Beneficiarys appropriate 2003 tax return.



9



---

##### Table of Contents

All entities that receive distributions under the Plan are responsible for reporting and paying, as
applicable, taxes on account of their distributions. Each Beneficiary is strongly advised to consult its own tax advisor regarding the federal, state, local and foreign tax consequences of holding or disposing of an interest in the UCT and of
receiving distributions from the UCT.



8.    Disbursements and Expenses



The Statement of Operations includes a section titled Disbursements & Expenses and the Statement of Cash Flows includes a section titled Cash Flow from Trust Operations. Both of these sections have line items
titled Distributions by UCT and Trust Expenses. Set forth below are the descriptions of the types of disbursements and expenses included in each line item:



Distributions



These amounts represent payments made to the holders of Allowed Claims in Class 4A, as described in Note 5. Distributions have been made to holders of
Allowed Claims during the quarter ended January 31, 2004 in the aggregate amount of $1,416,485. Distributions of $973,961 were made to holders of Allowed Claims during the quarter ended January 31, 2003. Aggregate distributions since the inception
of the trust total $11,686,984, representing 8.4743% of Allowed Claims to holders who have provided taxpayer identification numbers as required by the Plan.



Trust Expenses



These amounts represent payment of expenses of the UCT, including trust administration, professional fees, claims resolution, and other costs. Trust
expenses include the fees of the Trustee which are paid pursuant to the fee arrangement agreed to and approved by the UCTAC upon the appointment of the Trustee in conjunction with confirmation of the Plan and the formation of the UCT.



|ITEM 2. |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|------- |  | --------------------------------------------------------------------------------------



The following discussion should be read in conjunction with our financial statements and related notes included in this
Form 10-Q.



Application of Critical Accounting Policies



The Trustee believes the following critical accounting policies, among
others, are subject to significant judgments and estimates used in the preparation of these financial statements.



Cash Basis of Accounting



The UCT financial statements are prepared on a cash basis of accounting. Transactions (including the recording of interest earned) are recorded when cash
is received or disbursed. The Cash Basis Balance Sheet includes cash arising from cash transactions, while the Statement of Operations includes cash receipts as additions and cash disbursements as expenses/deductions. The Trust Agreement, approved
by the Bankruptcy Court as part of the confirmation of the Plan, provides for the fiscal year of the UCT to end on April 30.



10



---

##### Table of Contents

The UCTs financial statements present, to the best of the Trustees knowledge, the cash
receipts and disbursements from the UCT for the period reported. The financial reports and accompanying information were prepared for the use of the Trustee and the UCTAC and for filing with the Bankruptcy Court in accordance with Section 7.1 of the
Trust Agreement. While not required under Generally Accepted Accounting Principles, the Trustee believes that reporting financial information from the date of the inception of the UCT is more meaningful for holders of Beneficial Interests than
reporting fiscal year information only and accordingly has included such information on these financial reports.



Reserves



No accrual has been made for potential liabilities or recoveries (including interest earned, but not yet received or estimates of future distributions
from the FOL Liquidation Trust), however, the UCT has established Disputed Claim Reserves and Other Reserves as required or allowed by the Plan and the Trust Agreement, which reserves have been established in the reasonable business judgment of the
Trustee and pursuant to order of the Bankruptcy Court.



Tax Status



The UCT is intended to qualify as
a liquidating trust for federal income tax purposes, and therefore should be taxable as a grantor trust. The holders of Beneficial Interests will be treated as grantors; accordingly their pro rata share of all items of income, gain, loss, deduction
and credit will be included in the income tax returns of the holders of Beneficial Interests.



Changes in net assets



Funding from
FOL Liquidation Trust and Investment Income



During the
quarter ended January 31, 2004, the UCT received distributions from the FOL Liquidation Trust in the aggregate amount of $336,236 and received interest on invested funds in the amount of $21,514. During the quarter ended January 31, 2003, the UCT
received distributions from the FOL Liquidation Trust in the aggregate amount of $1,441,011 and received interest on invested funds in the amount of $95,985. Since its inception, the UCT has received distributions from the FOL Liquidation Trust in
the aggregate amount of $20,222,607. The UCTs investments have yielded interest income in the amount of $436,637 since its inception.



Reserves



In accordance with the terms of the Third Amended Reorganization Plan and the Initial Distribution Reserve Order, the UCT has established reserves for
allowed and disputed claims. The Disputed Claims reserve consists of the ratable proportion of all cash allocated for distribution on account of each disputed claim based upon the asserted amount of each disputed claim or such amount as may be
agreed to by the holder of the Claim and the UCT or as may otherwise be determined by the Court. As of January 31, 2004, the UCT holds total reserves of $8,972,260 for Allowed and Disputed Claims, including $1,441,534 for 203 holders of Allowed
Claims who have not provided the taxpayer identification information required by the Trust Agreement. As of April 30, 2003, the UCT held total reserves of $15,784,302 for Allowed and Disputed Claims. The reserve for Allowed and Disputed Claims
decreased on account of distributions made to holders of Allowed Claims and resolution of Disputed Claims.



The UCT also holds a Case Administration Expense Reserve in the amount of $858,003 as of January 31, 2004, which is to be used to fund expenses of
adminstering the UCT, as more particularly described the the Trust Expenses section below. As of April 30, 2003 the Case Administration Expense Reserve was $1,646,966. The decrease in this reserve is due to payment of trust expenses.



Distributions



11



---

##### Table of Contents

An Initial Distribution of 3.9297% was authorized by the court and made by the UCT to holders of Allowed
Claims on October 30, 2002 in accordance with the Initial Distribution Reserve Order, and periodically thereafter to holders of subsequently Allowed Claims. On July 30, 2003, the UCT made its Second Distribution in the amount of 4.5446% to holders
of Allowed Claims pursuant to the reserving methodology approved by the Bankruptcy Court for the First Reserve Motion. This brings the total distribution to holders of Allowed Claims to 8.4743% as of January 31, 2004, which is the distribution rate
received by holders of Allowed Claims which have been allowed subsequent to July 31, 2003.



Distributions have been made to holders of Allowed Claims during the quarter ended January 31, 2004 in the aggregate amount of $1,416,485. Distributions of $973,961 were made to holders of Allowed Claims during the
quarter ended January 31, 2003. Aggregate distributions since the inception of the trust total $11,686,984, representing 8.4743% of Allowed Claims for which required taxpayer identification information has been provided.



Outstanding Claims



On the date of inception of the UCT, there were approximately 3,450 Class 4A Claims. The UCT has filed various objections to
Claims and, after notice and hearing, orders allowing and expunging claims of non-responding claimants were entered by the Court. The UCT has resolved certain other claims on a consensual basis. As a result, on January 31, 2004, there are
approximately 1,935 Class 4A Claims remaining. Of this amount, 1,300 claims totalling $154,921,570 have been allowed. There remain approximately 635 Disputed Claims as of January 31, 2004.



Trust Expenses



During the quarter ended January 31, 2004, the UCT paid expenses totalling $218,593 which include trust administration,
professional fees, claims resolution, and other costs. During the quarter ended January 31, 2003, the UCT paid expenses totaling $380,667. Since its inception, the UCT has paid trust expenses totalling $1,846,997. Trust expenses include the fees of
the Trustee, which are paid pursuant to the fee arrangement agreed to and approved by the UCTAC upon the appointment of the Trustee in conjunction with confirmation of the Plan and the formation of the UCT.



Pursuant to the Third Amended Reorganization Plan, the UCT received
$2,705,000, which is allocated solely for trust expenses and which is to be returned to the FOL Liquidation Trust to the extent not used for such expenses. At this time, while reserving all of its rights with respect thereto, the UCT believes that
no additional funds need be allocated from the funds currently held in the Distribution Reserve for Allowed and Disputed Claims as possible funding for trust expenses of case administration. The UCT anticipates that all or substantially all of the
funds held in the Case Administration Reserve will be used for case administration expenses, and that any amount needed beyond such reserve should be relatively small. If trust expenses for case administration do exceed the Case Administration
Reserve, the UCT anticipates that such required additional funding can be funded from future distributions from the FOL Liquidation Trust and/or interest income. Accordingly, the amounts expended for trust expenses are not anticipated to
significantly impact the distributions to the holders of Allowed Claims in Class 4A due to the separate funding of all, or substantially all, of the UCTs trust expenses.



|ITEM 3. |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|------- |  | -----------------------------------------------------------



Response:    None.



|ITEM 4. |  | CONTROLS AND PROCEDURES.
|------- |  | ------------------------



(a) Evaluation Of Disclosure Controls And Procedures



An evaluation was performed under the supervision and with the participation of the UCTs Trustee, of the effectiveness
of the Companys disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act) as of January 31, 2004. Based on that evaluation,
the UCTs Trustee concluded that the Companys disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under



12



---

##### Table of Contents

the Exchange Act, is recorded, processed, summarized and reported as specified in Securities and Exchange Commission rules and forms.



(b) Changes in Internal Controls



There were no significant changes in the UCTs internal control over
financial reporting that occurred during the UCTs most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the UCTs internal control over financial reporting.



PART II  OTHER INFORMATION



|ITEM 1. |  | LEGAL PROCEEDINGS
|------- |  | -----------------



Pursuant to the Third Amended Reorganization Plan, the UCT operates under the jurisdiction and supervision of the Court and will continue to do so until
the UCT has received its final distribution from the FOL Liquidation Trust, all general unsecured claims are resolved and the UCT is terminated pursuant to the terms of the Third Amended Reorganization Plan.



Since its inception, the UCT has filed various Omnibus Claims Objections
motions with the Court in connection with bankruptcy claims resolution. Most of the general unsecured claims as to which objections were previously filed have been resolved either consensually or by default order entered by the Court. The Court
retains jursidiction to hear disputed claims matters in the event that the parties are unable to consensually resolve any of the remaining claims as to which objections are pending. The UCT anticipates filing additional Claims objections in the
future.



The UCT is not aware of any facts or circumstances
giving rise to any claims that would result in litigation against the UCT, nor is the UCT planning to file suit against any third party, except as it may relate to claims resolution.



|ITEM 2. |  | CHANGES IN SECURITIES
|------- |  | ---------------------



Response:    None



|ITEM 3. |  | DEFAULTS UPON SENIOR SECURITIES
|------- |  | -------------------------------



Response:    None



|ITEM 4. |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- |  | ---------------------------------------------------



Response:    None



|ITEM 5. |  | OTHER INFORMATION
|------- |  | -----------------



Response:    None



|ITEM 6. |  | EXHIBITS AND REPORTS ON FORM 8-K
|------- |  | --------------------------------



|    |  |                                                                                                                              
|--- |  | -----------------------------------------------------------------------------------------------------------------------------
|A.  |  | Exhibits                                                                                                                     
|    | 
|31. |  | Certification pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|    | 
|32. |  | Certification pursuant to Section 906 of the Sarbanes  Oxley Act of 2002.                                                   
|    | 
|B.  |  | Reports on Form 8-K                                                                                                          
|    |  | None                                                                                                                         





13



---

##### Table of Contents

SIGNATURES



Pursuant to the
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, we have duly caused this report to be signed on our behalf by the undersigned, thereunto duly authorized.



THE FRUIT OF THE LOOM UNSECURED CREDITORS
TRUST.By:

Clingman & Hanger Management Associates, LLC as Trust Administrator


By:

/S/    W. EDWARD CLINGMAN, JR.W. Edward Clingman, Jr.Principal






Date: March 15, 2004



14



---

##### Table of Contents

|              |  |                                                                                                                                
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------
|Exhibit Index |  |                                                                                                                                
|31.           |  | Certification pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes  Oxley Act of 2002.
|              | 
|32.           |  | Certificate pursuant to Section 906 of the Sarbanes  Oxley Act of 2002.                                                       



15